After reading through Rawles' Survivors, I never thought I'd get my wife to pick up another prep/survival related book again. Luckily I married well, and she actually requested that we read Patriots a few days back. I think she's curious to see if it actually is better than the lousy Survivors (it is!).
Anyways, one thing that I noticed a few pages in is that the Grays (the protagonists) don't really have a savings account - their funds are depleted by paying some bills and taxes in advanced, maybe a couple thousand bucks - yet they have massive supplies of guns, ammo, precious metals, BOV, a well stocked retreat, etc. Of course, Rawles' TEOTWAWKI comes by way of hyper-inflation, so they may have just been wise enough to get out of dollars before they were worthless.
On the other hand, many others in the survival world speak very little of having any kind of savings beyond precious metals and preps. This is, I feel, a potentially dangerous and irresponsible message to send. You need savings!
An Emergency Fund is Essential
First off, having an emergency fund of cash is one of the best preps you can have. Cash is the solution for many of the real-life problems that we face, and not having a backup leaves you open to a variety of problems. I'd rank an emergency fund up there with just about any of the prep basics.
In good times, you may have to resort to debt to cover unexpected expenses/cash emergencies. Car breaks down? Need emergency dental work? Lose your job and need to pay rent? An emergency fund is recommended by pretty much any financial planners worth their spreadsheets.
We all have unexpected stuff happen and we want to be prepared for it -- that's what this is all about, right?
Yes, you can take precious metals on down to the local coin/pawn/jewelry shop and sell them off for cash if needs be. You can certainly keep some of your savings/emergency fund in precious metals, but there's a lot to be said for the immediacy of cold, hard cash on hand. And hey, under most disaster scenarios, precious metals buyers aren't going to be open for business and the credit card and ATM machines won't be working - cash is king.
We have an emergency fund that will cover all of our costs for about two months if we tightened up the budget sufficiently. We're working on adding to it slowly and surely. It is about 75% cash and 25% precious metals. We don't have a set amount that we're working towards.
Don't "Prep" Away Your Future
Secondly, we all need to save money, whether its for buying a car, a home or saving for retirement. And even if your cars and home are paid off in full, you should still be saving - your car will need replacing, your home will need repairing/updating and so on.
The retirement piece is a big one that many gloss over--I've heard people talk about clearing out the 401k or whatever and using it to buy preps. That's scary stuff. Don't do that! You can responsibly prepare for bad times without sacrificing your life/retirement savings. If TEOTWAWKI doesn't come and you manage to live to retirement age (likely scenarios!!!), then you will want to be able to retire or at least slow down.
Third, we have something called diversification - basically avoiding putting all of your eggs in one basket. If you dump all your normal savings and investments in favor of preps and precious metals, you're essentially just betting on one eventuality - the end of the world. What happens if that eventuality never occurs? You've missed out on a lot of other opportunities and growth that could have happened elsewhere and potentially screwed over your financial future.
So, take a diversified approach to where you put your money. Yes, buy preps and increase your self sufficiency. But don't ignore other areas as well--retirement savings, investments and so on.
Anyways, I'm probably preaching to the choir here. Prep in moderation. An emergency fund is an important prep. Be responsible! Don't dedicate all of your resources to preparing for Armageddon. Plan for the future.