Financial Security Doesn't Always Involve Just Saving Cash

There are plenty of articles out there about saving cash and building emergency funds to help people ensure financial security. And while this is a pertinent aspect of protecting yourself against the unforeseen pitfalls of life, it isn't necessarily the only way to ensure that you are secure.

Just as with most investment strategies, when steeling yourself against emergency situations -- whether they are financial or otherwise -- it's often a good idea to diversify yourself and your strategy, as well as plan for a variety of possible scenarios.

The Staples

Many people think in terms of cash when they consider building an emergency fund. There are however, those of us who also think about the staples of life when it comes to creating an emergency supply. While I'm not advocating going as far as those people you see on those coupon shows who have 100 boxes of cereal on their shelves or 1000 tubes of toothpaste, being prepared with a several month supply of food and water may not only help to protect against things like natural disaster or civil strife, but also against things like a layoff or job loss.

In such a situation, food equates to money, and the more food you have on hand, the less you'll have to buy should an emergency arise. I always try to have at least several months' food and water supply on hand. Not only does it make me feel a bit safer, but with food price inflation, it provides more purchase power, allowing me to wait until sales arrive in order to buy.

A Home

While I make no secret of the fact that I'm a huge fan of renting, I'll certainly admit that not owning a place of your own outright can at times put you at a disadvantage, especially in a financial emergency. That continued monthly payment (mortgage or rent), whether you have money coming in or not, can be a severe burden upon an individual or family as clearly illustrated by the mortgage and real estate meltdown of late.

Having a home paid off and in the clear could certainly play and important role in staying financially sound in a cash crisis.

Property

I'm not big into collecting stuff, but antiques, collections, and collectibles can be another way to diversify your ability to protect against financial disaster. From comic books, coins, baseball cards, and stamps, to dishware, furniture, and art work, such items could be redeemed for cash when you find yourself in a tight spot financially. Though I'm not advocating running out and spending cash that could be put toward an emergency fund upon such items, if you already own them or inherit them, or just can't resist the urge to splurge occasionally, they might serve as a backup source of emergency income if needed.

Abilities

Some people might tend to overlook how valuable their skills and abilities could be when a financial emergency hits. For me, my writing serves as a convertible form of cash, with a stockpile of articles acting as a sort of reserve of currency if you will. But in an emergency, I can also rely upon my ability to grow and tend a garden as well as various outdoor skills.

Other people may have artistic creativity or building skills that could be converted into cash form should their regular source of income fail them or they are left cash strapped and in a pinch. Such abilities can be an important consideration in financial security planning and one that not everyone considers.

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.