by Bruce W. Helmer, RPC (President)

At the top of the list in being prepared for emergencies is to have access to immediate cash to meet your obligations in the short term. Once again, I part with conventional wisdom on the approach to money for emergencies such as sickness, injury, unemployment, or some unforeseen catastrophe.

Many advisers will tell you to keep three moths worth of living expenses in savings or some liquid investment. (By “liquid,” I mean money that you could withdraw tomorrow if you needed it.) In many respects, I am more aggressive than others in financial matters, but when it comes to emergencies, I am more conservative. I recommend maintaining six months worth of living expenses in a reserve fund. Jobs are less secure these days, new ones take longer to find, and medical costs are in the stratosphere. All of these factors are sound reasons to provide yourself and your family with a bigger cushion.

Perhaps my approach to a rainy-day account is conditioned by the innate conservative nature of the farming heartland where I grew up and which remains arguably the foundation of the economy in this part of the world. Even if our economy is no longer farm-based, many of our social practices and customs are.