Earlier this year I spent some time with a group (148) of high school students discussing personal cash management. Of course the discussion was at a level that they could immediately relate, cell phones, ring tones, and gym shoes. Curiously their concept of cash, credit cards and the use of leverage was a bit off and uninformed. I wondered how many of us don’t really get the idea because it’s not being passed on to our kids.

“Cash is King” in personal circumstances is an expression used to relay a message that cash is always good.  Most times it describes a situation in which having cash is better than a return on the stock market or long term debt.


Cash is King is the first logical step in every persons financial plan. Without sufficient cash, you are sentencing yourself to bondage. When looking to build your net worth, the foundation should be a solid emergency fund. Ideally your emergency fund should cover your expenses for 3-6 months. In todays tough job market, a year would not be out of the question.  If you had no income starting today, how long could you pay your primary bills? Now more than ever a solid side stash is imperative. Don’t look to anyone or anything else to help you in times of need. If you can, start building your war chest now.

A war chest is a container for the personal weapons(Smart Debt) and protective gear(Savings) kept in the household. Building a war chest may take some serious decisions. Look at your checkbook and identify where you are spending your funds and what is waste. Waste resembles items you can go without like $5.00 cups of coffee.  Give yourself a weekly spending limit and track it diligently. Things may knock you off the line but that is simply a way to plan better next time.

Avoid the trap of false security. Begin to save whatever you can. Begin with a bank account without debit card access. Most people that start a savings account really are starting a deferred spending account. They withhold $50.00 per pay period directed towards a savings account. When asked how much is in the account, often the reply is less then $100.00. Clearly this is a temporary holding spot for future spending.

Remember that tough times take tough measures!