Cash is king!

NOTE: I am not an economist. I am, in fact, the last person on earth from whom you should take financial advice. That said, here is some financial advice.

Survivalists have been harping about putting your money into gold or silver as a way to preserve or increase its worth. That may have been a good idea in 2006, and if you cashed in last summer, you may have made a bit of money. However, these precious metals have been crashing since July 2008. Unlike the survivalists I have no idea where to put your money, but a sure thing is that bulking up your savings (in FDIC insured accounts) is probably a good idea about now. There is no telling when it will be advantageous to pull money out of the stock market again. A mere TWO MONTHS ago the DOW bounced to about 11,500--so, if you were thinking about cashing in your 401K, with minimal losses, that boat has sailed. It is more likely to benefit you to leave your stock portfolio alone for now and await better days when you can recoup your losses. The question is, should we continue to shovel 8%-10% of our income into the stock market? There are a few things that we should seriously consider, given the present state of the economy.

IF you have the requisite 6-12 months of savings that would see you through a sudden job loss, then remaining invested in the stock market is probably a good idea--stocks are cheap and continuing to buy at these prices will most likely pay off in the long run, providing the stock market exists in the future. But, let's face it, Americans are notoriously bad savers. I would bet that many of us hold more debt than savings.

IF you have little in terms of liquid assets (i.e. cash in the bank), then you could find yourself in very desperate circumstances if you get the ax within next few years, especially as unemployment rises and jobs become more scarce. You need a rainy day fund because there is nothing but rain in forecast.

Ideas on how to generate cash, quickly!
1) Adjust your 401k, if you have one, from, say, 8% to 2% or 3%, or opt out altogether for a while (providing that opting back in is not a problem) and take the extra money you find in your paycheck and put it in a savings account.

2) Stop eating out. This can be difficult, but putting together an inexpensive, yet healthful, menu week by week can save you hundreds of dollars a month (depending on how much you eat out). Estimate how much you spend per month on food and restaurants, then estimate your grocery bill based on your menu. Take the difference, divide it into the number of paychecks you receive per month, and put that much into the bank every paycheck.

3) Get your Scrooge on! Don't spend a lot on the holidays this year. Send cards, cookies, artwork, pictures of your family, homemade CD compilations--get imaginative. I suggest spending $10 on a box of holiday cards and a couple bucks on stamps and then stash the remaining $500-$1000 you would normally spend in the bank. Trust me, your friends and relatives, supportive as they are, would rather see you keep your home than have to move in with them in the event that you lose your job next year.

4) Take a temp job. If you can sacrifice your weekends or a few hours in the evenings, then pick up a short term job...wherever. A call center, delivering pizzas, waiting tables, all good cash generators. Put your side job paychecks in the bank. Remember, you only need to do this until you have secured your rainy day fund.

5) Sell stuff. It has never been easier. Root through all your stuff and put the things you don't use or particularly need into consignment, on ebay or take it to a pawn shop. Hold a garage sale. Put the proceeds in the bank.

6) For the truly adventurous, you can take on a roommate or a boarder. Or consider moving in with a family member and splitting their rent/mortgage. Doing this can ultimately save you the most money per month. Put the difference in the bank.

There are other ways to generate cash, but the above suggestions are fairly easy and can be accomplished today. It is crucial that we start stashing money now and develop a buffer, the larger the better, that can see us through the difficult times ahead.