Most financial planners will tell you to have enough cash readily available to cover a minimum of six months living expenses. This is a tough figure to achieve for many people.
A "credit line" is NOT cash. You would just be amazed at how fast banks can cancel those credit lines that they were so eager to extend to you when economic conditions were still good. (Remember the uproar over credit cards, recently??) Banks were (and still are) seriously reducing the amount of credit allowed on those cards and/or cancelling credit cards outright......even though you may have always paid your account on time, never missed a payment, and have a good Fico rating.
Much the same situation was ongoing in the 1930's Depression, when the economy was still predominantly rural. Bankers fell all over themselves to extend generous credit to farmers during the 1920's when the good times were rolling. When the bottom fell out of the economy in 1929, those same banks were even faster to foreclose and/or call in loans on farms, farm equipment, and homes.
Cash is also not an asset that would have to be sold to realize the money out of it. That rules out your house, your car, your truck, motorcycle, pleasure boat, RV and any other material objects you may look upon as being "as good as cash".
The American people are currently getting a tough economic lesson about what has value........and what doesn't. You can't drive down any middle class residential street, without seeing several vehicles for sale parked in front of houses. Usually RV's, loaded up SUV's, boats on trailers, etc.
Often, the owner's house also has a For Sale sign in front of it, too. People have gotten into the habit of looking at their house as a big piggy bank. It isn't. It is what it always was. Shelter for you and your family. Like everything else you own.....it is "worth" whatever amount you can get a buyer to write a check for. No ready and willing buyer??? Then, it's worth zero.
Craig's List is loaded with stuff desperate people are trying to sell to raise cash. Same for e-Bay. Or, they are trying to sell anything and everything at garage sales.
This is all what happens when you have a country, like the USA, where the GNP is 75% based on consumer spending. The only surprising element is that the crazy system lasted this long before the house of cards fell down.
Cash is King. Your parents were right, when they tried to tell you to save something out of every weekly paycheck. Save as much as you can. Save till it hurts. If you still have a little bit left over, and feel that habitual desire to "buy something"........go to your local coin shop every week and buy a few US silver coins. (Gold is clearly out of reach, now, for the average person.)
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