Is Your Personal Finance Ready For War?

I only have a post or two scheduled for publication because I am prepping for war. Technically, we’re not at war or maybe we are, it’s hard to tell with our current government but in any event there were refineries in many parts of the middle east that have blown up. The Straits of Hormuz is closed which will lead to oil & gas prices soaring. This all begs a question, is your personal finance ready for war?

I’ll give you my thoughts at the end of this long post but I did pose the question to AI and the answer below is what AI suggests for a personal finance war footing.

AI RESPONSE

Given the events reported on March 7, 2026, the premise is plausible: major outlets are reporting an ongoing U.S.-Iran war, disruptions through the Strait of Hormuz, and sharply higher oil and gasoline prices. Reuters reported Hormuz has been impassable for days and Time reported the U.S. national average gas price jumped 14% in one week to $3.41/gal, with crude above $90.

From a personal-finance perspective, the goal is not “beat the crisis.” It is to stay liquid, keep paying for essentials, avoid forced selling, and preserve optionality if payment rails, brokerages, banks, or markets go offline for days or weeks.

The core principle

Prepare for three separate problems at once:

1. Inflation shock: fuel, food, utilities, and insurance get more expensive fast.
2. Payment-system outage: cards, ACH, wires, brokerage access, payroll, or banking apps may fail temporarily during a cyber incident. Federal agencies explicitly advise keeping some cash, maintaining records, and preparing financially for disasters.
3. Job/income shock: recession, layoffs, reduced hours, market closures, or delayed settlement.

What to do first

1) Build a tiered liquidity plan

Do not keep all your “emergency money” in one place.

Use four buckets:

• Wallet cash: enough for 2–3 days of routine spending.
• Home cash reserve: enough for roughly 2–4 weeks of bare-bones expenses if cards and ATMs are down.
• Primary insured bank/credit union: your normal operating cash.
• Secondary insured bank/credit union at a different institution: a backup if one bank has an outage.

Ready.gov and the FDIC both advise keeping some cash on hand as part of disaster preparation.

A practical rule:

• Start with 2 weeks of essential spending in cash
• Then build toward 1–3 months of expenses in immediately accessible insured deposits
• Then keep the rest of your emergency fund in short-term safe assets you can access without selling stocks at a bad time

For most households, that means not stuffing huge amounts of currency in a house, but also not relying exclusively on digital access.

2) Keep deposits inside insurance limits

If you hold large balances, spread them so you are not accidentally uninsured.

• FDIC covers deposits up to $250,000 per depositor, per insured bank, per ownership category.
• NCUA provides similar $250,000 coverage at federally insured credit unions.
• SIPC covers brokerage customers if the broker fails, up to $500,000 including up to $250,000 for cash, but it does not protect against market losses.

Implication: cash needed for bills and survival should generally sit in insured bank or credit-union deposits, not as a big idle cash balance at a brokerage.

3) Add redundancy to payment access

Assume one rail fails.

Have:

• two checking accounts at different institutions
• at least two credit cards on different networks
• one debit card you rarely use but keep active
• a checkbook
• one small stash of small bills for local purchases
• at least one bank with physical branches or ATM access nearby

This is about operational resilience, not chasing yield.

How much cash to keep

Cash at home creates theft/fire risk, but zero cash creates outage risk. The sweet spot for many households is:

• Minimum: enough for 1 week of food, fuel, medicine, and local transport
• Better: 2–4 weeks of essentials
• Mostly in small bills: 5s, 10s, 20s

Think in categories:

• groceries
• gasoline / transit
• prescriptions
• a few utility or repair payments
• one hotel night or evacuation cost

Do not advertise it. Use a bolted fire-resistant safe, and limit who knows.

Where to keep the rest of the emergency fund

For worst-case personal-finance resilience, a strong order of operations is:

1. Physical cash for outages
2. Insured checking/savings at two institutions
3. Short-term Treasuries / T-bills / Treasury money funds for reserves not needed immediately
4. Long-term investing only after those layers are built

Why short-term Treasuries? They are obligations of the U.S. government, but access can still be operationally inconvenient if your brokerage or TreasuryDirect access is disrupted. TreasuryDirect itself is web-based.
So for crisis liquidity, do not count an online-only Treasury account as your only accessible reserve.

Reduce your dependence on cheap energy

If Hormuz stays disrupted, energy prices are the first transmission channel into household budgets. Reuters and Time both report current supply disruptions and higher fuel prices.

Financially, the best “hedges” are often boring:

• top off vehicle maintenance now
• keep fuel tanks above half
• pre-buy routine consumables before panic pricing
• reduce commuting where possible
• stock a few months of critical meds and household staples
• budget for utility spikes
• delay optional road trips and large fuel-sensitive purchases

This matters because the cheapest inflation hedge is often simply needing less of the thing that spikes.

De-risk your debt

In a crisis, fragile balance sheets break first.

Priority order:

1. eliminate or reduce credit-card balances
2. build a minimum-payment buffer for all debt
3. avoid variable-rate consumer debt
4. avoid margin loans and securities-backed lines unless you understand the liquidation risk
5. avoid “buy now, pay later” stacks and short-term cash-flow traps

Why: if income drops and markets are volatile, leverage can force bad decisions.

A very practical move is to pre-fund a separate “bills buffer” account with:

• 1–2 months of mortgage/rent
• utilities
• insurance
• phone/internet
• minimum debt payments

That buys you time if payroll is delayed or online access is intermittent.

Protect payroll and income

If banking rails are disrupted, direct deposit timing may become messy.

Prepare by:

• keeping your employer’s payroll contacts offline
• downloading recent pay stubs and tax forms
• knowing whether your employer can issue physical checks
• maintaining one backup account for payroll redirection
• asking yourself: “If my paycheck is delayed two weeks, what breaks first?”

If self-employed:

• keep a separate tax reserve in insured cash
• keep copies of invoices, receivables, client contacts, contracts, and entity docs offline
• diversify where clients pay you
• keep a manual invoicing/payment contingency plan

Harden your household against cyber-financial disruption

During crises, scams and identity theft typically surge, and consumer agencies recommend steps like security freezes and document protection.

Do these now:

• freeze your credit with Equifax, Experian, and TransUnion
• enable MFA on email, banks, brokerages, retirement accounts, and password manager
• use unique passwords
• set transaction alerts on all accounts
• save a printed contact list of banks, brokers, insurers, employer, doctors, and family
• print account numbers and last statements
• keep copies of IDs, titles, insurance policies, wills, trusts, and powers of attorney

CFPB and FTC both emphasize gathering and protecting financial records before emergencies.

Most important cyber rule: if a “bank” texts or emails during a crisis, do not click. Call the number on your card or statement.

Make your records usable without the internet

Create a paper binder and an encrypted offline copy containing:

• bank, credit-union, brokerage, and retirement account numbers
• insurance policies and agent contacts
• mortgage/lease documents
• debt list with minimum payments and due dates
• employer, payroll, and benefits contacts
• prescriptions and doctors
• passports, birth certificates, Social Security cards, titles, deeds
• beneficiaries and estate documents
• a one-page net worth and cash-flow snapshot
• a “what bills must be paid first” sheet

CFPB’s disaster checklist and FEMA/FDIC guidance all point in this direction.

Don’t let “investing” crowd out “surviving”

In this kind of scenario, the highest-return move for most people is not a clever trade. It is:

• a bigger emergency fund
• lower fixed monthly expenses
• less consumer debt
• insured deposits split sensibly
• more resilience in food, fuel, meds, and records

Only after that should you think about portfolio positioning.

Portfolio positioning for worst-case scenarios

Not personal investment advice, but from a risk-management standpoint:

Sensible

• keep a larger-than-normal cash allocation for near-term needs
• shorten duration in fixed income if rate/inflation risk worries you
• avoid concentrated bets
• rebalance, don’t panic-trade
• keep enough dry powder so you are never forced to sell equities for groceries or rent

Risky

• heavy leverage
• concentrated energy bets you cannot emotionally hold
• storing too much wealth as physical cash
• assuming broker or exchange access will always be available tomorrow
• assuming money market funds and brokerage cash are equivalent to checking access during an outage

SIPC protection is about broker failure, not market losses or guaranteed same-minute access under all conditions.

Insurance review: often overlooked, very important

In a severe disruption, insurance deductibles and exclusions matter.

Review:

• homeowners/renters coverage
• auto coverage
• health insurance deductibles and out-of-network rules
• disability insurance
• life insurance
• umbrella liability if you have assets to protect

Then keep:

• policy numbers
• claims phone numbers
• photos/video inventory of home contents
• scanned receipts for major assets

This is one of the highest-value prep steps because it protects the balance sheet you already built.

Family and legal resilience

Make sure at least one trusted person can operate if you cannot.

Have:

• beneficiaries updated
• transfer-on-death / payable-on-death designations reviewed
• durable power of attorney
• healthcare directives
• list of where assets are held
• instructions for bill payment and emergency cash access

In crises, operational continuity at the household level matters as much as total net worth.

If you are retired

Raise your cash runway. Retirees are especially vulnerable to sequence-of-returns risk and forced selling.

Consider:

• 1–2 years of planned withdrawals in safer/liquid assets if that fits your plan
• keeping spending cash outside the brokerage
• simplifying account structure
• keeping paper copies of account statements and required contacts

If you have a small business

Separate personal and business resilience plans.

Have:

• payroll contingency
• 1–2 backup banks
• backup card processors if possible
• printed vendor and customer lists
• manual invoicing capability
• extra working capital for fuel, shipping, and utilities
• a plan for 30/60/90 days of lower revenue

What not to do

• Don’t keep all cash in one institution.
• Don’t hold uninsured six-figure balances without understanding coverage.
• Don’t rely only on apps and passwords stored in the cloud.
• Don’t leave big credit-card balances floating.
• Don’t assume “I can always sell investments tomorrow.”
• Don’t panic-buy speculative hedges you do not understand.
• Don’t turn your home into an obvious cash or supply target.

A practical 7-day action plan

Today

• withdraw a modest amount of small-bill cash
• verify FDIC/NCUA coverage exposure
• pay down high-interest revolving debt
• top off prescriptions and essential consumables
• fill gas tanks

Next 48 hours

• open or fund a backup checking account at a second institution
• print key statements and contacts
• freeze credit
• turn on MFA and transaction alerts
• make a bare-bones emergency budget

This week

• move excess uninsured deposits
• build a 1-month bills buffer
• document insurance, IDs, titles, estate docs
• create a household “financial go folder”
• decide what expenses you would cut on day 1, day 7, and day 30 of a disruption

Best single-sentence answer

From a personal-finance point of view, the best preparation for a worst-case oil shock plus cyber disruption is: hold enough physical cash for short outages, keep the bulk of reserves in insured deposits split across institutions, reduce debt and energy dependence, maintain offline records, and make sure no essential bill depends on one bank, one card, one app, or one paycheck.

My Thoughts

Some of the things on this list are also common to How To Prepare For A Recession. I have already done some of the things on this list and I am working on others. I’d rather be a bit paranoid and safe not sorry later. All sorts of things are running through my head, what if another 9/11 happens? What if the stock market is shut down? What if banks are shut down or limit cash withdrawals? What if there is a massive cyber attack that brings down the Internet?

It’s impossible to plan for every scenario so the best thing to do is focus on what’s important to your situation. For example, if I had a baby right now, I’d be stocking up on formula milk because you never know if there will be massive fuel disruptions that limit delivery of baby formula. I don’t have young kids anymore so I am focusing on other things to keep me and my current family safe.

For security reasons, I won’t be disclosing all the things I’m doing but this list is a good start. I also won’t be posting more than 1 post that’s already written and scheduled to post, I will be busy prepping.

Share The Wealth

Are you prepared for a prolonged war or massive disruptions?