This should go without saying, but Grandma was right. We should all be saving for a rainy day. When I was in high school, I lived with my grandmother. For my senior project, I had to interview someone who had lived through the Great Depression in the 1930s. So I sat down with my grandmother at our kitchen table and helped her remember things that had happened to her 50 years prior.

One of the themes that came out of the interview was that using real money that you actually have in the bank (or the cookie jar) makes a difference in a crisis. She told me a story about how she had gone down to the company store (my grandfather was a foreman in a sawmill business), and the gentleman at the store implored her to put the groceries on a line of credit for her family. He said, “Mrs. Sasser, I know you and Pete are good for this, and this depression will all be over soon. Please charge some more food for your family.”

I love the way she told the next part of the story. She said, “So I told him—Mr. Store Owner, I don’t want to come out of this depression with a bunch of debt, so you just take my money, and send me on my way.” After the depression lifted many years later, my grandmother wasn’t still in debt for her groceries.
In a crisis, having real money is important.
Don’t keep spending like you always have. If you have an opportunity to put some money aside, do it. We encourage our clients to have 3 “Buckets” of savings:

Bucket 1—Setback Savings: This savings is designed to cover the expenses that are not as regular as a monthly bill but do come up frequently throughout the year. These are expenses such as home maintenance, car maintenance, medical bills, clothing, and Christmas.

Bucket 2—Salary Emergency Savings: This savings is designed to cover 3-6 months of expenses in the event of a crisis. Can you imagine the relief of having this in place during a crisis such as this one? Work on gathering up these funds as quickly as possible.

Bucket 3—Retirement Saving: This savings is designed to cover expenses once you have reached retirement age. Warning: Don’t tap into this account too quickly. In a panic, I have seen people take money out of this account before they truly evaluated their situation.

Idea #1 is geared toward putting money into savings, not taking money out. As you are evaluating your savings strategy, determine where are you most vulnerable. Put aside any extra money you receive during a crisis. Target one of these savings accounts, depending on where you feel the most pressure. In a financial difficulty, the first two buckets are typically where the majority of us feel the most financial pressure, so be certain to pay extra attention to those when determining where to put money aside during a crisis.

In the instance of this pandemic, you might be able to put money aside in bucket 3 while the stock market is a buyers’ market if you have plenty of money set aside in buckets one and two.

Everyone’s situation will differ. Do what you can with what you have.

For some families, the extra they have is $20. They should put it aside. They may need it.

For some families, the extra they have is $200. They should put it aside. They may need it.

For some families, the extra they have is $2,000. They should put it aside. They may need it.

For some families, the extra they have is $20,000. They should put it aside. They may need it.