Financially we have become a just-in-time society.

It began with manufacturing, where factories would order parts from suppliers as they were needed because it was more efficient. Today, because of America's affluence, we as individuals live our lives 'just-in-time.' We eat out at restaurants, we rent our entertainment from the local video store, and buy everything with credit cards. It's more efficient, but what happens when disaster strikes? Oh I'm not talking about the Jericho scenario, but something more likely, such as the electric-grid going down, or a solar flare taking out a communications satellite; something happens that shuts down communications for a week or so. Are we prepared?

This scenario hit home for me during the blackout of '03. My brother was in the Detroit area at the time and described for me some of his hardships. It wasn't bad at first, he had some food and water in his house. It was when he went out to buy extra supplies that he ran into trouble. You see, my brother lives on credit cards. He buys everything with them because it's safer and more convenient. Unfortunately, when the store can't communicate to the credit card company, he can't buy anything. How many Americans are in the same boat? Sure, we can prepare for "The Big One," but are we prepared for "The Little Ones?" Are we prepared for a storm that shuts down power to the city for a week? Can we live without a credit/debit card for a week to 10 days?

The solution to this is to have a store of cash on-hand, but there are two problems: security, and acquisition. First, there is risk involved with storing cash. A thief could break in; the house could burn down; etc. Therefore, this risk should be mitigated by having a fire-safe bolted to the floor. This keeps the cash safe from fire, and prevents a thief from waking out with it.

Acquiring cash is a bit more tricky. Sure one could pull out a stack of money from the bank, but that may cause hardship; I recommend a more gradual approach. Two techniques I've found useful are saving cash-back rebates from those "evil" credit cards, and rolling change. It's surprising how much change one gathers over the course of a year; last year I managed to roll almost $500. Is that enough for a week? Maybe, if it's just the grid that goes down. Maybe not, if one has to buy supplies to repair his house in a disaster area. Regardless, it is a way to acquire a basic emergency fund without suffering a financial hardship throughout the year. A final note about cash, it's better to have many smaller denominations than a few large. One cannot expect to get change for $100 when cash is scarce.

While preparing for the next disaster, please remember to include cash in your plans. Credit/Debit cards are great for the convenience they offer, but they are useless if the transaction cannot be processed. Besides having food, water, and shelter, we too need to be prepared financially in this just-in-time society.

We always keep a stash of cash on hand, but in a power outage or satellite problem, you can't buy anything anyway, at least in most stores. Nothing has a price tag, they have barcodes, so the clerk does not know how much to charge you. Then, even if a price is available, the cash drawer won't open without electricity. You can't buy a burger at McD's, 'cuz the clerk only knows how to push the button with the picture of a Big Mac, and the bagger (or whatever they call them) doesn't know what to put in the bag or on the tray, 'cuz they get their order info from a computer screen, and it isn't working anymore. You can't buy gas, the pump is computerized. The list goes on and on. We are totally dependent on power and computers...

Not completely.

Your smaller, non-meglomart stores will be able to function. Even if it a smaller chain, like TrueValue or a regional grocery store, they can adapt easily enough if the manager on duty has to brain cells to rub together. That's part of why I do business with them.

You have had much better luck than I have...

I also live in a small town. It probably helps.

Look for the little mom&pop stores, the corner markets run by Asians and Pakistanis. And don't forget the dollar stores -- they never scan, just count.

When we had the wind storms last year, the local market was down to generator power, which ran lights and cash registers, and nothing else. And they stayed open, bless their little pea-picking hearts. They had no freezers, no refrigeration, no card scanners (I don't think), no lighted sign, no hot deli.

But they continued to receive deliveries of canned goods, drinks, bottled water, bread, etc.

And, something of a miracle: they gave away all their frozen products, and sold all their meat while it was still good, as soon as it was obvious the power wasn't coming back on: One dollar for each package of meat, and that meant hamburger, steaks, hams, turkeys, etc. And, since the power outages were rather checkerboard in nature, many people still had power, and were taking in friends and family, and could use the extra food.

All told, a nice bit of management.

Sue

It was after that same blackout that I started trying to save up cash to have on hand. I was lucky and already had the "stuff" I needed and didn't need to purchase anything, because I too had very little cash on hand. My budget is very very tight, so loose cash is hard for me to come by, but little by little I've managed to have an amount that will be helpful should I find myself in a similar situation again. Probably not "enough" but much better than before. And I'm still putting a little away every paycheck - even if it's just a fiver. Also - Most of it is in smaller denomonations as during the black out those stores (or individuals selling stuff) that were open didn't always want to make change from a big bill.

The big stores have a plan in place. I worked at a store through college and we had a couple power failures and a system failure.
The cashiers instruction is to keep the line moving and customers happy. So after a few minutes of waiting for the system to come back up a manager gives the ok to go into manual mode. The store switches to backup generator which can run for a few hours and the registers act as basic adding machines. The managers from various departments are called up front to help with any price disputes but unless its a large ticket item you make the prices up as you go. We jokingly said that those were the biggest sales they have since your taking customers words on prices but they want the customer back another day so they are willing to take a short term loss.

Another thing that seems counterintuitive: paper.

You can call the credit card company and get approval - it takes a while, but it works. Just need a back-up carbon-copy based system. We did this at the restaurant I worked in (during high school), as well as the hospital where I worked (after college). It's just short-sighted of stores to do away with a stand-by system.

I remember working at Staples, and I had to explain to a lot of the high school kids what the manual card imprinters were. But the stand by plan there was to process the customers on hand, and lock the doors unless they could show cash.

Geez, I hated that place.