Our whole economy has been built on the "Just-in-Time" (JIT) supply chain business approach. It “saved” money for investment. A business did not have to have money sitting on the shelf in inventory. The home owner did not need to have the “Winter” supply of food in the house.
In other words just run to the store when you need it.
Over time I will be discussing how that impacted the small business and home and their approach to emergency preparedness. Plus I will cover ideas on how the home can be prepared both financially and in inventory. Today I thought I would cover emergency cash. Cash is King/Queen today. We all love it and we all need it.
I remember my sister, who had good investments, decided she would start her own personal savings account for the emergency. She called me after returning from the bank. The interest rate was so low her commented – “I might as well keep it at home under the mattress”.
In the past it was thought a a small business or family should have 90 days (3 months) of emergency money saved. Few were really able to do that. Today I read that might need to be a year’s salary. Living on the “JIT” did not allow for a fast shift to having cash and lots of it available quickly. Small businesses and families have been scrambling just as the "big" businesses to conserve cash quickly.
My daughter-in-law is looking over every single item her family spends money on. Then she is assessing how important it really is. Does the family really need it? Can the costs be trimmed? She also is buying more items in bulk. [I will talk about that approach in another post.] She is trying to squeeze out of their limited income some emergency money.
Finding a safe place for the emergency money is also important. You have several options.
- Bank Account
- Credit Union Account
- Part of Your Investment Portfolio
- Safety Deposit Box
- Precious Metals such as: Silver and Gold
- Safe/Vault at Home
A good idea is to have emergency money in several locations. Remember in the hurricanes we have all seen on TV the cash machines become empty real quick! Each location listed has value. Each location listed could hold part of the emergency money. Remember when keeping cash at the small business or home it is important to own a safe/vault.
Well this is enough for today. I will continue covering the subject overtime.
Keep Conserving Cash!
Judy
