It’s a truism in the personal finance world. “Every household should have an emergency fund covering three months of expenses.” It’s a good rule and I follow it, especially with recent shock of sudden job loss many folks have had.
However, thanks to Coronavirus, I’m expanding the rule for myself. Instead of just having cash on hand, everyone should have three months of emergency coverage. Coverage means the standard supply of cash and some bare necessities.
For a while, it looked like coronavirus threatened access to essentials. It may still threaten some supplies (like a potential incoming meat shortage). Once people felt the ping of scarcity, panic buying ensued, because God forbid you don’t have a year’s supply of toilet paper on hand.
Let’s say an even deadlier, more rapidly-spreading coronavirus appears in a few years — which is completely plausible. Or maybe a solar flare cuts all communication lines as it did in 1859. Or another black swan event disrupts our lives once again which no one predicts (except Bill Gates, it seems).
Are any of these disruptive events likely to happen? On any given day, no. But are they likely to happen ever in the future? You betcha.
You can take reasonable steps without freaking out. Being prepared doesn’t mean building a bunker in your backyard. A few practical measures can hedge your long-term risk and benefit you in the short term.
Here are a few I’m personally doing.
Get a chest freezer
Most Americans’ freezers could fit a few frozen pizzas and maybe a tub of ice cream. A chest freezer is big enough to allow you to store real food and runs between $200–600. Order a quarter of a cow from your local butcher and you can store it in one of these almost indefinitely. Pound-for-pound, you’re saving money on meat, and it’s much higher quality.
If the supply chain gets tied up, you’ll be covered. If disaster never comes, you’re still getting higher quality beef than anything you’ll find in a standard grocery store, and at a much cheaper rate.
When your kid graduates high school, or you’re just throwing a next-level Fourth of July party, you have the household “infrastructure” to grill like a king. And if *it* hits the fan, you won’t have to just eat rice and beans.
Learn to garden
Gardens are a dirt-cheap way to get real food. You get to be outside soaking up Vitamin D while beautifying your landscape. The vegetables you grow are going to be more nutrient-dense than the weak, artificially-ripened tomatoes at the grocery store.
Starting a garden now means you have fresh food on hand in general and a replenishing food source.
Store dry essentials
Meal-replacement powders have grown in popularity in recent years, mostly for their convenience. One of them is Huel, which I have in my pantry right now.
These powders tend to all have the same general formula: mix with water (or whatever else you want), shake it up, and you have a healthy meal replacement. It’s not just a protein powder, but includes fats, carbs, and tons of vitamins. I’m not being paid to plug them, I just like it and have used it for years. It’s incredibly convenient for travel or hiking. At least it’s better than crushing another bag of barbecue potato chips (my strongest food temptation).
However, if you’re normal and don’t like powdered meals, just stock up on canned veggies and whatever else you’d want to eat in an emergency. It doesn’t need to be fancy or taste wonderful — it just needs to be nutrient-dense and keep long enough so you don’t have to replace your stock every six months.
Don’t forget medicines. You might not be able to pre-order three months of prescription drugs for obvious reasons, but having ibuprofen, paracetamol, thermometers, and a first-aid kit means you’re reducing your overall risk.
Finally, build your stock slowly. If you’re buying just slightly more than you use every time you go out, you’ll be in good shape without preventing anyone else from getting any. That rule applies for everything on this list.
This covers your three months of essentials. These simple steps won’t take away from your normal day-to-day life, and they can actually add value in the short term as well as hedge the downside in the long term.
Don’t be a panic buyer. Be someone who intelligently hedges long-term risk.