Your Financial Survival Guide

With the Dow Jones still above 20,000, most people aren’t giving a second thought to a stock market collapse, a massive devaluation of the dollar, or an attack on our banking system. That being said, now is THE BEST TIME to prepare yourself in the event of a financial armageddon.

The problem with high flying economies like ours is they create a false sense of security. Seeing the DOW break 20,000 had some people celebrating the end of the recession, the next goal of 30,000, and rosy futures for all investors.

The flip side of this coin is every high has a low, we’re still pumping up our economy based on rampant printing of money and governmental debt will reach unprecedented highs under the new administration. (It can’t NOT rise with the sheer amount of debt and level of interest paid on the debt. Take a look for yourself at www.USDebtClock.org to see real-time updates.)

Candidly, the motivation for writing this article came from my Christmas grab bag gift for men at my in-laws extended family party last year: A sweet Bear Grylls survival tool. What came with it was a miniature instruction book of how to survive the great outdoors with only your know-how and this incredible device. It got me thinking about how people would survive if the stock market collapsed, their credit & debit cards stopped working, and prices ballooned to epic proportions.

To comprehend where this begins, you first must know that as of February 2017 there is approximately $1.47T in American currency in circulation. According to a report done by NPR, nearly ⅔ of all $100 bills are held outside the US. Let’s assume a more conservative 40% of all currency is abroad, which would leave $882,000,000,000 ($882B) circulating throughout the U.S.

Given that there are 326 million Americans, the amount of cash per citizen would equate to about $2,700. (Recent reports have put that number closer to $1,500 depending on what percentage is abroad.)

Now, $2,700 per citizen might seem like a great deal per person, but it’s not equally distributed throughout the US. A great majority of it is probably in larger cities and more affluent communities in our country. So, the likelihood of you being able to go to the local bank or credit union and gain access to $2,700 is slim to none. If even dozens of people did this tomorrow the cash reserves of the bank would be tapped within hours.

Tip #1 in the Financial Survival Guide: HAVE CASH.

How much cash is based on a number of factors including what your monthly bills are, how little you could live on for a number of days, and how much you have available to you.

This cash, ideally, is stored in different places — at home, in your vehicle, and at work. Here’s why: In the event of a terrorist attack on our financial system where hackers take down the backbone of the credit/debit card networks, the only payment that would be accepted is cash. (Let’s assume checks are no good either. They’d have to have a way to guarantee funds after all!)

If this happened in the middle of the morning when millions of Americans are at work, what would you do on your way home that night knowing that your gas tank is on empty? By noon all of the cash available at financial institutions would be claimed. So for starters, even $100 in twenties is a good emergency stash in your car’s glove compartment or under the liner in the console.

The amount of cash you keep at home depends on your comfort level, what you have available, and how long you think this financial predicament could last. In the example above, what if for the next 3-5 days the banks were more or less shut down because the available cash has been depleted from the system? Those that are prepared for this would most likely be hoarding their stash, not adding it back into circulation, making acquiring bills even harder as days passed by.

Realistically, our system should be back up and running smoothly within a few days, but there will be millions of Americans completely unprepared for this. Consider the statistic that 63% of Americans couldn’t come up with $500 in cash in an emergency. Scary, right? To what lengths might people go that have no cash, no food, no gas after several days?

What you store at home should be mostly in 20’s and 50’s as change for larger bills might be hard to come by. My recommendation is at least one month’s worth of bills in cash if you can swing it.

Tip #2 in the Financial Survival Guide: HAVE ACCESS TO CREDIT

While we’re big believers in deleveraging and paying off debt at MoneySavvy.com, we also are firm believers in having access to various forms of credit (when used wisely) which can be extremely helpful. Sometimes financial storms don’t come in the way of terrorist attacks and stock market tumbles. Often it’s a major catastrophe like a freak storm that causes a basement to flood or a roof to leak and for whatever reason, your insurance won’t cover it.

You may have seen Home Equity Lines Of Credit offered by your local financial institution, and branded as a way to build your dream kitchen or remodel the basement. Our take is every homeowner should have a HELOC available to them in case of an emergency. They’re cheaper than a credit card, as readily available as a check, and sometimes have the ability to transfer cash right into an account. Just having one doesn’t necessarily mean that you have to use it.

Credit cards should be used as a last vehicle to cover the costs that you can’t readily afford out of pocket. That being said, having available credit can ease people’s minds if cash is super tight. As a sidenote, I find credit cards incredibly convenient, but pay mine off every month as well.

Tip #3 in the Financial Survival Guide: KNOW WHERE EVERYTHING IS

My parents are well-heeled travelers and understand the perils that happen when identities are stolen and cards are compromised from 5,000 miles away. As a result, when they travel we always receive copies of all of their pertinent documents in case we need to do something on their behalf.

It’s prompted us to do the same just in case something happens and we need quick access to ALL of our credit cards, store cards, debit cards, drivers licenses and passports, not to mention the most relevant information pertaining to life insurance policies, real estate and any investments. In essence, we’ve created a document that allows us to pull anything we need to know about financial instruments in a moment’s notice. This is either kept in a safe or safety deposit box as a printed document or as a password protected document in the cloud.

To put this binder together, do the following:

  1. Copy the front and back of all of your cards so that you have the credit card numbers AND the phone numbers to call the company should you need to.
  2. Copy your drivers license and passport into a document in case you need access to that information.
  3. Grab the top page of the insurance binder and copy that for every policy you have. Keep these all stored in the same place as your card information.
  4. Copy your birth certificate and the birth certificates of your children.

Knowing where everything is will give you some peace of mind in the very off chance that we experience some sort of financial calamity like identity theft or compromised security abroad. It’s a good practice to do this kind of deep dive at least once a year!

Tip #4 in the Financial Survival Guide: HAVE A HEDGE AGAINST THE VALUE OF MONEY

It should come as no surprise to the MoneySavvy.com reader that our dollars are becoming less valuable year after year. It’s a product of inflation, which is the cost of our goods becoming more and more over time. Yes, you can get a very cheap computer or television today compared to what they were 40 years ago, but look at the cost of milk, bread, or more importantly the cost of a college education from then to now. That’s inflation.

To protect yourself against the ever-eroding value of the dollar, some experts will tell you to put your money into “hard assets”. These are things that retain their value over time and are often pegged in an indirect fashion to the stock market. Meaning that when the market it high, these investments might be lower and when the stock market (and/or value of the dollar) is low, these rise. Easily referred to examples of hard assets would be silver and gold.

My experience in buying silver and gold is limited to buying 1oz silver and gold bars from places like Scottsdale Silver and the American Precious Metals Exchange. The logic in buying these assets is precious metals have lasted the test of time when it comes to retaining their value. An ounce of silver today is worth vastly more than an ounce of silver 40 years ago. A dollar today is worth far less in buying power today than 40 years ago.

Another of the hard assets I’ve heard people buying are things like collectible vehicles and Rolex watches. Again, a seemingly speculative investment, but for collectors that are in the know about what types of cars or watches to buy have come out like kings in their investments.

One businessman I met would buy himself “sales awards” in the way of Rolex watches knowing that he could not only write off the cost of the watch as a business expense, but sell the watch if he were ever in need of cash. In effect, he was building a hedge against the value of money.


While I don’t foresee an apocalyptic financial occurrence in the immediate future, nor do I plan on having my identity stolen or security compromised, I do believe in structuring your affairs to eliminate as much risk as possible. My grandpa always said, “better safe than sorry!” The above methods are just a few of the ways to do just that in your financial life.