It’s a weird time in the world right now. Statistically, it is still the safest time ever in human history. But, sea levels are rising, and storms unprecedented in their destructive power are becoming the norm. And despite our growing online connectedness, the world is feeling increasingly fractured. People of all political persuasions find it impossible to have even the most basic conversations with those who disagree with them. This isn’t a political post (we have no intention of making this a political space), but we also live in the real world where a lot of people are feeling uneasy, and where some people’s rights are under attack.
That’s not something we can ignore, and in our lives outside of this space, we’re doing what we can to speak up on behalf of those who need allies. We’re also writing checks where they’re needed. As we posted on Twitter last weekend:
Those of us who are saving aggressively or who have already retired on a big stockpile have a responsibility not to hoard all of that money, but to use at least some of it to help others. Because, truly:
What is financial freedom worth if our other freedoms aren’t protected?
But this post isn’t about that. (Though if you’ve been meaning to give and want some suggestions, here are ours.)
This post is about why, with everything going on in the world politically and environmentally, there has never been a more important time to up your savings game.
The standard I tend to apply to most life decisions is “What will let me sleep best at night?” (Have you guessed that I’m a terrible sleeper? If only I was a better one, I’d be so much more compatible with all the work travel.)
So thinking about things going on in the world that might stress you out — and that’s bound to be different for each of us — the answer to the sleep-at-night standard in almost every case is: increase the amount of money you have saved.
Catastrophe Comes Quickly
We live in a wildfire area, and we’ve heard time and time again that if fire comes our way, we will likely get 30 minutes or less to evacuate. A half hour. To collect everything that’s important to us and get out safely. (That is why absolutely everything is backed up online and we keep few valuables in the house. We want to be able to grab our laptops and dogs, and peace the heck out.)
In most natural disasters, there’s little warning, and a home and most of the belongings in it could be gone in what feels like the blink of an eye.
While any one of us has low odds of falling victim to a catastrophe like that, the odds increase each year as our climate becomes more volatile. Coastal counties are at particular risk — and that’s 40 percent of everyone in the U.S.! So while we can hope that it won’t ever happen to us — and I certainly hope none of this happens to any of you reading! — there is no downside to being prepared, just in case.
Catastrophic Needs Arise Quickly
Thinking beyond ourselves, the needs of others are sometimes apparent before tragedy strikes, but often those needs arise in an instant. Think about Hurricane Katrina, the Haiti Earthquake, or the travel ban last weekend — overnight we went from status quo to desperate emergency, and people working to help those affected needed big money fast.
Having money saved that you can hand over when the need is there puts you in the powerful position of directly shaping the kind of world you want to live in.
The True Meaning of Financial Freedom
I’ve never liked the term “FU money.” I understand the concept, and think it’s absolutely wise to have enough money saved that you don’t need to stay in a bad job. What I don’t like is how blatantly individualistic that name for it sounds, as if I’m the only one who matters in the world, and I want to have the ability to tell everyone else to F off.
If you want to live like a hermit forever, then that’s a fine attitude. But if you understand economics, you know that we all prosper most when everyone has an opportunity to contribute meaningfully to society. And if you like living around other humans, and want to have some of them as friends, then an FU attitude may not serve you so well.
I get it, it’s just a cute name for money that gives you the flexibility to be jobless for a while. But what we call things matters. The names we assign things frame how we think about them, and we are what we think. If we think in FU terms, we position ourselves against the world, instead of as part of it.
What if instead of thinking in FU terms, we think in terms of our place in society and in the world. True financial freedom is not just having the ability to quit a job we don’t like, or even to quit working altogether, but to actively shape the world into the one we are most excited and proud to live in.
The Most Important Time to Save
We are as big of proponents as anyone of not scrimping yourself into misery, and making sure you’re still enjoying life on the road to FI. But depending on where you live and what you’re concerned about, this might be the right time to take a clear-eyed assessment of what it would take to save a little more. Or if you’re just starting to save, great. Keep at it, and look for ways you can continually up your game. Because there are a whole lot of reasons why you could end up being glad you have more cash on hand.
Saving more of your money gives you the ability to:
Come to the aid of others — With so many of us living near the coasts, where hurricanes and tsunamis are a threat, and others living in areas that could see tornadoes, wildfires, earthquakes or flooding, chances are good that someone you know could lose everything. If you want to be able to step in and help, then save that money.
Donate to important causes in urgent moments — If you see images of people suffering in the aftermath of a natural disaster, or trying to escape from wartorn areas, or detained at airports, and you want to be in a position to help, then save that money.
Get out of dodge, if you have to — We all have homeowners or renters insurance, and that’s great and all, but what if you literally have to evacuate and fend for yourself for days, weeks, months or years? We’ve heard that if our house burns down in a wildfire, we should expect a rebuild to take two to three years, because we’ll have to get in line behind everyone else who also loses their home. Some areas after hurricanes or floods can’t be built on again, and your entire investment could be wiped out (insurance companies pay to rebuild, they don’t cut you a check). Or if something even worse should happen, and you need to evacuate your home, your area, your country, having that money saved could be the difference between being stuck and finding a way out.
Sleep better at night — If none of this bad stuff ever happens again, and you’ve saved up for it all just in case, then good news: you’re going to sleep a whole heck of a lot better at night. Knowing that you can take care of yourself and others is priceless.
Why Do You Save?
To some people, “emergency” means a car breaking down, while others define it in more apocalyptic terms. What is your vision of what your emergency savings are for? Have you decided to increase your savings in light of world events, or based on a commitment to do more to help others in need? We’d love, as always, to hear your thoughts on this stuff!