The big news on Friday was an agreement between The White House and Congressional leaders to reopen the government until mid-February to allow border negotiations to continue.

Whatever you feel about President Trump, Speaker Pelosi, the shut-down, ‘The Wall,’ or any other hot-button that’s sure to upset someone, there is a salient, non-partisan lesson that’s worth noting: the importance of either maintaining an emergency fund or sufficient liquidity.

Although financial planners typically recommend having six months’ worth of expenses on hand in an emergence fund, a 2018 Bankrate survey said that just 29 percent have that on hand.

Bankrate also reported in the same survey that 23 percent didn’t have an emergency fund, 22 percent said that it would last less than three months and 18 percent said their emergency savings would carry them for three to five months.

Frankly, I was surprised that the numbers were that high, since I’ve read that 78 percent of Americans live paycheck-to-paycheck and that 50 percent of Americans don’t have $400 on hand for emergencies.

I wonder about all of those numbers, but the big point is that most people don’t have enough set aside for a rainy day.

Fortunately, most of our clients don’t face that particular stressor and can meet most unexpected expenses without too much trouble.

In fact, for most of our clients, I don’t think that having a dedicated emergency fund is necessary, although having liquidity is important.

A lot of our clients keep substantial cash balances in their checking account, sometimes upwards of $100,000, mostly because it feels good to have that on hand.

In my view, that’s too much cash, the opportunity cost of not investing is high, especially given where interest rates are today (better than before, but still awfully low).  That said, if you can afford it and it makes you feel good, then I say go for it.

But instead of cash, I think that most clients should maintain a home equity line of credit (HELOC) that can be drawn on at anytime.

A lot of clients have a great deal of home equity (the value of their home minus their mortgage), and as long as the HELOC doesn’t cost anything when there is no balance, it’s a great way maintain a lot of liquidity without much cost.

I also think that during their working and saving years, clients should build some taxable investment accounts.  While we certainly recommend tax-deferred and tax-free accounts, it’s quite common to see a client with a large 401k or IRA, a large home and nothing else.

For that circumstance, I say kudos on both of those accomplishments, but I also think that folks would be better severed with a little more liquidity in the form of taxable assets.  Yes, taxable accounts aren’t as tax efficient, but they can be very handy in a pinch.

The partial government shutdown is just another reminder to do what you already know you should be doing.  Six months ago, it may have been hard to predict the shutdown, but that’s the point – you want to prepare before the bad outcome, not after.

And, if you haven’t, there is no better time than now to get prepared for whatever comes next.