We had a decades long break from war, but now in the words of Aragorn to King Theoden: “Open war is upon you, whether you would risk it or not.”

It comes as quite a shock to many of us that we are living in a troubled world. The McDonald’s Peace Theory is being put to the test. Nations are warring against nations and we struggle to understand our enemies abroad as well as our political foils at home. Meanwhile our economy is still trying to recover from an artificial stop to fight the COVID-19 pandemic, a stimulus (that may have been the right call at the time), and then a second stimulus (that was definitely not the right call). Inflation is back to 1970’s Jimmy Carter levels and stocks are in a bear market.

That’s not good news.

Here’s some good news: We have more cash than we’ve had in a long time.

The personal savings rate in the U.S. is still near 50 year highs and most of us are tempted to hoard that money just in case something worse happens. Whenever our circumstances get bad we are all tempted to get cynical and start waiting for the other shoe to drop. When the market drops we all start fearing it will drop more. When inflation goes up we all start to fear hyperinflation and on and on it goes.

This is why it’s important to have a complete financial plan. Then the question of what to do with all that extra cash is easy to answer depending on what your priorities are.

Is your emergency fund low? Fund it.

Is your high interest debt unpaid? Pay it off.

Is it time to start extra funding for retirement? Invest in your Roth IRA, HSA, SEP, SIMPLE, 401(k), etc.

Are you saving for a house? Sinking fund it.

Do you want to travel to see your grandkids? Spend it.

It’s important to not go “off book” and start winging your financial plan when stuff gets real like it is right now. Decisions made on gut-feelings are not wise especially in the financial realm. Your feelings aren’t a good representation of what is true no matter how much you want them to be.

If your gut is saying to hoard cash as a safety net, remember that inflation is eating away your spending power and your real goals may be going unfunded. You may be setting yourself back instead of powering through this bearish time. Look at the facts and stick to your plan.