Current events dictate that it would be wise for every family to have a disaster recovery plan. Stuff happens all the time. Some of it not of your own creation. Whatever its source, it impacts you and forces you to regroup. What are you going to do when disaster strikes? How are you going to recover from it? One of the important aspects of financial capability is Protecting. You have worked hard to make gains to achieve financial well-being.
Resilience is an important part of financial well-being. As any world-champion prizefighter legendarily says, “it not just how hard a punch you threw; but also how hard a punch you took?” that matters. Being prepared and not just depending on luck or largesse to bail you out of a tight spot is a Money Smart Lifestyle. In the fight that is working-class financial life in 21st century America, a properly resourced emergency fund will help you absorb and recover from life's inevitable shocks. Your emergency fund can contain more than just cash.
​Prepping is a movement. The focus of this post is narrow. It is an overview discussion of food stores as a portion of an emergency fund, not a preppers guide. Prepper or not, it is prudent for every family to have a food security plan that anticipates disruptions. Also when properly integrated, a food store can become a cash flow resource. Let’s look at some basics.
Types of disruptions where everybody is affected by the same catastrophe.  You should be able to sustain your family for a minimum of 3-7 days in the event of a catastrophic event.

• Electrical outages often are short term but crippling to most lifestyles if more than a few hours. Imagine 5 days without electricity?
• Weather-related events are unpredictable in severity but nonetheless inevitable.
• Hazardous material or air quality alerts can be disruptive and prohibit travel.
• When you “shelter in place” it requires food plus fuel for cooking and heat.
• Evacuation go-bags stuffed to sustain your family if you have to leave in a hurry.
• Natural disasters are widespread and recovery can take days to reach you. 
• Terrorists or cyberattacks to the electrical grid or financial networks.

Types of disruptions where only your family is affected by the catastrophe. Being able to maintain your family’s food security for 30+ days can not only provide you peace of mind in the lean times but it also can be a cost reduction resource when your balance sheet is stronger. You should have a 30-day disaster recovery plan in the event that something happens to you. For example, you lose all or part of your income. Can your family survive for 30 days? No doubt big changes are required when this happens. However, food insecurity doesn’t have to exacerbate the trauma nor add to the drama. 
There is a chronic lack of cash when your income is routinely reduced through employment practices such as temporary layoffs, reduced hours, uneven or seasonal schedules, and lost hours due to unpaid sick or disability leave. Using a food store as part of your meal plan can reduce stress and the need for cash during such times.
Types of disruptions where society collapses for 90+ days by a zombie apocalypse or whatever is beyond the scope of this blogpost. Besides, you won't be using Money anyway, but your food stores may have some barter value. Good luck.
Here are some things to do to start prepping for disruptions. You don’t try to swallow the elephant in one bite, so to speak.

• Start and build your food stores relentlessly. Then treat it as a living resource that contributes to your family’s security. It is important to actively manage your food stores. You must have zero tolerance for waste. Make sure your store is prepared for a “best of worst-case” scenario.
• Medications Build a medicine surplus. Make sure you have a supply of all prescription and OTC drugs. A good way to get this is to let your pharmacy auto-refill your prescription. They normally will fill a monthly script every 3 weeks or so resulting in a co-pay approved surplus. Make sure to use the oldest meds first to keep your supply fresh. These are definitely items for the go-bag. A medicine surplus can also mitigate a loss of insurance from a job loss.
• Food, water, energy, and fuel These are the big 4. You’ll need heat to survive and fuel to cook your food. Using generators, cookstoves, propane, charcoal, etc., should only be done with a complete understanding of both ventilation and safety. Whether or not, you have a generator depends on your economic level and how long you can keep it running during an extended outage if you can't get fuel. Remember Puerto Rico. You really need a plan to quickly cook food that can no longer be refrigerated. Next, what will happen to the frozen food if the outage is longer-term?
• Cash on hand is always appropriate. When, if (yes I mean "when if" not "what if"), there are no ATMs or online transactions available? Make sure to have a mix of denominations and not just big bills. Also if you live near a border you may want to add the next country’s currency to your go-bag in case of an evac.
• Develop a sense of community, Now. Get to know your neighbors on purpose. You’ll need each other in a crisis. That includes neighbors on all sides.
• How will your family entertain itself for days with or without electricity? It helps a lot if people don’t “get on each other’s nerves” during a disruption. What will you do when the digital brain candy needs to recharge and can’t?

The holiday season is the perfect time to lay up food stores. Americans eat too much. The agribusiness-retail complex encourages this overindulgence in many ways. Some of the most flagrant consumption occurs during the Holiday season. This is the time that many staple items necessary to stock a food store go on sale.  So use that to your advantage to build and rotate your stock. Americans waste a lot of food, also. The average family waste about 30% of its food purchases, especially around the Holidays. Therefore if most families were merely conscientious about eliminating food waste they could redirect current resources from their garbage cans toward their financial well-being and food security. They could begin to build a food store through diligence and frugality without a lifestyle change.
Make sure the plan works by rotating your stores regularly. Rehearse emergency situations before the emergency arises. These dry runs can be made into fun family activities. They will let you see where your plan needs tweaks. Can you really make 7 days of interesting meals using only your food store? Don’t wait until you have to do it to find out if you can.

Holidays are times of gathering for families. As such it provides opportunities to help the extended family strengthen its economic foundation. These are the perfect times to discuss estate plans, elder care, custodial expectations and more. Now that sounds pretty heavy and it may be depending upon how your family views these subjects. But not talking about it isn’t wise. 

Normally estate matters are resolved as part of a process that takes time to complete. But they must be started. Start with the easy stuff. Are wills in place for all adults 18 years and older? What happens to the kids? Are there durable power of attorneys and health care directives in place for all adults 18 years and older?  It is better to have these discussions before a crisis requires them. Not having proper estate plans in place has put significant stress on family relationships regardless of assets forever. Yours will be no different. 

Take the next steps depending on what is learned. Help those that have no plan get one written and recorded. Encourage those that have a partial plan to upgrade. Lead by example.

Family gatherings can also provide opportunities to save money through the elimination of redundant streaming services expenses. Most streaming services allow for multiple profiles or device logins. Maximizing profiles used for each service and spreading the cost of the subscriptions can expand extended family access while lowering individual unit costs. This is also a time to review subscription services already shared to see if they are still used and eliminate those that aren’t.  

Some services can be eliminated seasonally depending upon demand. The family can adopt a “binge and go” strategy. This is where a service is subscribed to for a period of time to allow episodes to be binged. The effect is to make the service disposable, use it then lose it. This eliminates autopilot spending that subscriptions require.

Here is a list of some popular subscription streaming services and links to their multiple user policies:

• Hulu allows 6 profiles
• Prime Video not allowed
• Prime Music not allowed
• Netflix allows 5 profiles
• HBONow It's complicated
• HBOGo It's complicated
• Starz allows 4 devices
• Showtime & Showtime Anytime 5 devices
• Disney+ 7 profiles
• DirecTV Now 2 devices
• ​Xfinity Stream 3 devices via the internet ​

Living paycheck to paycheck is hard because there never seems to be enough money, ever. Being “broke” all the time ain’t no fun, that’s for sure. Especially if you make a “decent” income and know you should be doing better. This also encourages the unsustainable use of debt for lifestyle support.

It's not just how much money comes in and how much money goes out. It's also when does money come in, and when does it have to go out? That's called cash flow. If you manage your cash flow properly, you can reduce your stress and survive short term minor financial shocks.
 
The steps to proper cash flow management:

1. Get a calendar and note the dates when money comes in. And write down the dates when money goes out. This will give you a graphic look. Be sure to capture all sources of income including freelance and side hustles. I mark the income in green and outgo in red. Cliched but effective.
2. Contact your creditors, ask for a more convenient due date based on your calendar. This could be anybody from your landlord to credit cards, car payments, student loans, utilities, or insurance payments. Many may accommodate your requests particularly if it increases your capacity for on-time payments.

A lot of times you'll have more dates with money going out than you do money coming in. It’s not just the date when money has to go out, also its relative size to the money coming in has an impact as well. For example when a rent payment requires most of a pay period check.

My first confrontation with cash flow was during my first job. Newly married at 22, totally inexperienced at handling money. While also suffering from early-onset testosterone poisoning better known as “stupid looking for somewhere to happen” that silently infects so many American males. My beautiful young 20-year-old bride did not have much experience with money either. We were properly raised in Black middle class families where money was a closely held secret revealed only on a need to know basis under the penalty of death if revealed to anyone.

I got a job working for 3M Co as a territory sales rep. In 1973, my starting salary out of graduate school was $800 per month, paid once a month at the end of the month. That was all the income we had. Besides the salary, the job came with a company car. And they also reimbursed expenses bi-weekly, such as gas for the company car and meals with clients.

Being paid once a month will force you to learn how to manage money. Unfortunately, we made a ton of errors on the way to that knowledge. There was always seemed to be “a lot of month left at the end of the money.” It was a stressful way to live and led to an unmanageable debt load that would accompany us for years. I remember one particularly painful month when my wife made a simple arithmetic mistake in the check register. (These were the days before digital calculators, nevertheless ATMs, computers, or apps.) The account was overdrawn and there was nothing that could be done about it until next payday. Of course, the bank had no problem racking up overdraft fees throughout the month and immediately subtracting them from the next deposit. This made a bad situation worse and prolonged the pain for additional months.

I left that job for another job that paid more money more often, from once per month to every two weeks. The biggest change besides the slightly larger income was going from 12 to 26 paydays per year. That change lowered our stress and increased our capacity to save aggressively and spend wisely.

You can also use your credit card to control due dates. This is a strategy that is especially effective with multiple cards and delivers rewards as well. Remember cash flow is impacted by how much goes out and also when it goes. Using a credit card to pay an obligation can effectively extend its due date and allow you to retain your funds longer. Using a series of credit cards with rotating closing dates to pay routine obligations such as utilities, insurance premiums, etc can improve your cash flow and buffer unexpected increases. To use this strategy you must pay your credit card statement balance in full each month by the due date.

The 3 fundamentals of good cash flow management are simple and evergreen:

1. Get more in
2. Send less out
3. Keep as much as you can for as long as you can

Doing so depends on yourfinancial capabilities.

​

Power outages and interruptions happen. If they happen often enough or for long enough you could be eligible for compensation from DTE and Consumers Energy. The Michigan Public Service Commission (MPSC) Service Quality and Reliability Standards requires utility companies to compensate customers for losses associated with power outages. Rules regarding outage service credits and eligibility requirements can be found in the MPSC’s Service Quality and Reliability Standards. These standards provide customers a $25 credit upon request if the utility’s investigation of your request determines you have experienced a qualifying outage.
​There are 3 types of available credits:

1. Catastrophic conditions A customer is eligible for a credit under catastrophic conditions if the utility fails to restore service within 120 hours. A catastrophic condition is defined as an event that results in an official state of emergency or an event that results in an interruption, of 10 percent or more, of a utility’s customers. Customers need to notify their electric utilities of the outage. 
2. Normal conditions A customer is eligible for a credit under normal conditions if the utility fails to restore service within 16 hours after an outage resulting from conditions other than catastrophic conditions. Customers need to notify their electric utility of the outage. 
3. Frequent repetitive interruptions A customer is eligible for a credit for repetitive interruptions if experiencing more than seven interruptions in a 12-month period. Customers need to notify their electric utility of all service outages.

As a customer you need to complete the following steps:

• record the date and time of each outage
• record when the company was notified of the outage, and how the company was notified
• document when the service was restored.
• File your claim with DTE or Consumers Energy 

​To file a claim for damages caused by an outage with DTE you need a different claim form. Consumers Energy may use the same form as for outages. When the damage is caused by an act of nature—such as a storm, wind or lightning—the utility is not legally responsible. Check with your homeowner’s, renter’s or business insurance policy to see if your losses are covered. Most are, minus the deductible.
An investigation will be conducted and a decision will be rendered within 30 days. Your claim will be summarily denied if: 

• You are not the customer of record or the owner of the damaged property.
• Storms/Outside Interference - the utility will not be responsible for damages or losses resulting from weather-related conditions.
• Equipment Failure - The utility will not be responsible for damages or losses beyond their control unless it fails to exercise reasonable care and skill in furnishing the service.

You don’t have to wait for an outage to save on your utility bills. Here are some “semi-secret” discounts available, if you ask.

Financial shocks are inevitable during a lifetime. “Stuff happens” according to the PG-rated version of that cliche. When it does my language is more NC-17. Nevertheless, happens it does. The most common financial shocks for working-class families are:

• Medical
• Major household and automotive repairs
• Family emergencies meaning anybody you would choose to help rather than pay your rent.
• Criminal justice system interactions always cost money to win, lose, or draw.
• Temporary loss of income through reduced hours or layoff.

An emergency fund is foundational for achieving financial well-being. Having one increases your capacity to absorb financial shock. It enhances your resilience or ability to recover from the shock. To torture an analogy, in the prizefight of life,  it is not that you got knockdown; rather it is how long you stay down and what you are able to do after you get up that determines the outcome. An emergency fund can provide more solution options.

What is an emergency fund? It is a "liquidity buffer" between you and ruin. If you have very little saved — say $200 to $500 — each additional dollar you set aside dramatically reduces your likelihood of falling into financial hardship. It can be any of these items. Some are decidedly better options than others:

•  Cash on hand
• Liquid savings 
• Readily sold assets such as jewelry, stocks, bonds, guns, collectibles, 401(k), your body and time, etc.
• Credit Card Cash Advances
• Food on hand
• Family
• Accounts receivables or anybody who owes you money who is good for it now.
• Credit Score

How much is enough for an emergency fund? Emergency funds are highly individualized. The answer depends on a variety of factors including your health, your age, your temperament, dependents, housing situation, the stability of your job, your risk tolerance, and more. Just be mindful of the truism, "It’s better to have money and not need it; than to need it and not have it." Your emergency fund can’t be too big. Its size may determine how it is stored but not its existence.

​Forget the 3 to 6 months of take-home pay that is commonly parroted throughout financial media and literature. This goal is often unattainable for low-income wage earners. A more realistic minimum target is $2,467. A fund of this amount will be sufficient for most emergencies. Having such a fund stops you from getting stuck with short term remedies with long term consequences like being late on rent or borrowing from a payday lender. Often creating a cycle of cash draining late fees and prolonged financial insecurity.

Building an emergency fund is your #1 priority. You should well establish an emergency fund before you divert resources to the very prudent debt reduction strategy necessary for your long term success. You should continue or start making all minimum payments on time and continue to do so until your emergency is well funded.

Debt reduction is achieved by consistent application of payment to the principal balance. Having an emergency fund will let you maintain a good payment history so you won’t have to “rob Peter to pay Paul” when the inevitable happens. One missed credit card minimum payment can close off what may be a critical asset during a financial emergency and put a big hole in your safety net. Modified universal default terms may render a late payment to one lender a catastrophe in your creditworthiness regardless of your actual payment history.

Your ability to borrow should be viewed as part of your safety net. It creates capacity and demonstrates financial capability. Your credit card cash advances and spending limits arecritical components that can be managed to help mitigate some of the impacts of an emergency and buying you time. An excellent credit score can give you immediate access to additional money during an emergency. It is a MoneySmartLife strategy to responsibly and proactively expand your borrowing capacity annually. Just as your net worth expands annually so should your credit capacity. They weave your safety net tighter and softer.