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Dear Gary,

War is on the horizon. What should we do to prepare ourselves? I was a young teenager during most of Vietnam and I didn't have to make the financial decisions for my family. What do I need to know in order to plan for this frightening future?

Wendy W

Good question. How can we prepare for uncertain times? As a long time Florida resident, I think that hurricane preparation could provide a good example.

At the beginning of hurricane season you don't know whether you'll be affected by a storm or not. But, you know that it's much harder to recover from a storm if you aren't prepared. And that it's much easier to prepare well in advance of the storm. Last minute preparations are the hardest.

You also know that you'll need basic supplies, good neighbors and a willingness to tough it out. And that it's not possible to do all your preparations in one day. It takes time.

Preparing financially for a war is the same. We know that it's easier to prepare before the event. There's no one big thing that we can do to be 'prepared'. We need to do many small things. And, even if we're untouched by war or terrorists, the preparation won't hurt us. We should do these things anyway.

Begin with a regular savings plan. First, because you may need it. Some workers will lose their jobs. They'll depend on savings until a new job is found.

Second, because we may have disruptions in the banking system. The enemy would like to cripple the financial system. Have some cash available at all times. Your bank could be closed for days. It's also possible that ATM's wouldn't work and stores would be unable to process your credit card. Remember, you can always spend cash.

Savings will also help our country. Saved money doesn't just sit in a vault at the bank. It's loaned to businesses to help them grow. And that growth means new jobs and opportunities for all of us.

Some argue that consumers need to spend more. That's foolish. You don't create wealth by spending. You create wealth by producing something of value.

If you can, buy some stock. No one knows what the stock market will do tomorrow. I believe that the U.S. will come through this and be even stronger ten years from now. If so, now is the time to buy stocks or mutual funds invested in stocks. Over the past 200 years we've seen tough times. Yet, every generation has been more prosperous than the one before it.

Don't panic sell the stocks you already own. As we've already seen, the economy is resilient. It will bend. But it's very unlikely that it will break.

A note. I'm not suggesting that we profit from other's suffering. Owning stocks is a vote for our future. A vote that says that our loved ones did not die in vain.

Resolve to make small sacrifices to build up a 'war chest'. Bring your lunch to work a couple of times each week. Give up your premium cable channels. Or cable itself. Put whatever you save into your 'war chest'. You'll find opportunities to use it to help yourself and your nation.

Once you have a war chest be willing to share it with others. But, begin by being certain that your gift is used properly. The best charities use no more than 20% of the monies they receive for overhead and fund-raising. All charities are required to provide you with that information if you ask.

Do something for a needy neighbor. Many families will suffer financially. Don't wait for the government or someone else to help them. Share your blessings with those who need it.

Provide dinner once a week for a family with a laid off breadwinner. Share the clothes your kids have outgrown. Be creative. Think of what you'd need if your income were drastically cut. Then take action.

Stockpile some groceries. You might need to survive a week on the food you already have in your home. Almost everything you eat is trucked in from somewhere. Interruptions are possible. Be ready to share your supplies with your neighbors.

Make a friend. We're so rushed that we don't really know the people around us. After a hurricane we all check to make sure our neighbors are ok. Why not check on those folks today before the storm? Your new friendship will provide comfort today and be invaluable if times are hard.

Learn to cook more and buy fewer prepackaged foods. Plastic starts out as oil. We could face oil shortages. But, even if oil is plentiful, you'll make a dent in your grocery bills by eliminating those individually wrapped items.

Think of ways to get more use out of what you already have. It's a 'throw away' age. Perhaps you can't fix your VCR. But you can sew a patch on a pair of jeans. Think before you pitch it out.

Hold a garage sale. Our homes are full of things that we no longer need. But someone does. If you're embarrassed to take their money, give the items to a charity that will recycle them for you.

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