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.