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Why Every Family Needs a Financial Runway

October 28, 2026

Video Transcript

JD Durkin: Say hello to our next guest, Elaine King, founder of Family and Money Matters. Really nice to see you here today.

Elaine King: Great. Thank you for having me.

JD Durkin: Every portfolio here on Wall Street has an investment strategy. Why don’t more families have an investment strategy, or an overall plan to better manage their money?

Elaine King: Well, most families should have a cash policy statement, just like you have an investment policy statement for a portfolio. Because there are some things that we cannot project, like a divorce or a loss of income. The volatility in the market is important, but when families come apart, it’s very hard to recuperate if you don’t have a cash policy statement. So start that money conversation now.

JD Durkin: Among other things, you’ve also raised concerns about how Americans are saving, or maybe not saving. What are some of the biggest warning signs that you’ve seen in your career?

Elaine King: Well, credit card debt delinquency is going up. The savings rate has gone down to 4% in the US. So that means that the regular person cannot cover... Even if they have stocks and they sell them at the wrong time, what are they going to do? Go to their credit card, and their credit card is going to charge them 25% interest. Now you tell me, JD: do you know a stock that gives you 25% year over year and keeps accumulating?

JD Durkin: Certainly not.

Elaine King: Right. So that’s why every family needs a cash policy.

JD Durkin: There we go. Investors would love it if there were stocks that weren’t quite that much. We have inflation. We have more onerous borrowing costs. We have a very difficult macroeconomic backdrop. How should families be thinking about cash, more specifically, despite all of this uncertainty that’s going on in the background?

Elaine King: It’s very easy, once you have the discipline and the practice. Just have an automated savings percentage. So if it’s 4%, I suggest everybody have a 10% automatic savings, a reserve floor, just like a company has a reserve floor. And also a financial runway, because every company needs a survival rate, and every family, most importantly, needs a survival rate. And that’s three months of essential expenses.

JD Durkin: I love this question. I’ve been so excited all day to ask you this. What is one simple number that viewers who are watching this interview right now can calculate as soon as they get home tonight, to get a more holistic, better picture of where their financial health is?

Elaine King: So I’m going to use you as an example. You’re going to go home, and you’re going to look at your savings. Take that number and divide it by the amount that you have to spend every month on essential spending. So let’s say it’s $5,000, divided by three. How many months do you have saved? If it’s less than three, you’re in margin. And margin is not good, because that means that you cannot survive as a family unit. You should have more than three months of essential expenses, and that’s very easy to do right now.

JD Durkin: Yeah, that’s really good. That’s great advice. Really grateful for that. Before I let you go, and you just told me this moments before we came live on the show: Saturday is World Savings Day. What should people know, and how did this whole thing start?

Elaine King: Well, besides, you know, wearing a Halloween costume, you should always open your savings account and put a little bit of money in there, because saving comes before spending. That’s the key to saving. It’s a habit. It’s not an amount. Everybody should do it, because we never know. I don’t know about you, but maybe you know when the market’s going to go down. The market goes up and down. But family volatility is really hard to recuperate from. So you need cash to protect and secure the family unit.

JD Durkin: If I knew when the market was going up and down, I probably would not be doing this particular job. I wish I did know. But I’m really grateful for your time. All the best for a very happy World Savings Day, and a happy Halloween as well. Good to see you.

Elaine King: Thank you. Thank you so much.

JD Durkin: Elaine King, founder of Family and Money Matters. Come back and see us again.

As credit card delinquencies rise and the US savings rate falls to 4%, many families are entering an uncertain economy without a clear plan for managing their money. JD Durkin speaks with Elaine King, founder of Family and Money Matters, about why every household needs a cash strategy, the warning signs she is watching, and simple steps families can take to strengthen their finances.

King says that just as portfolios have an investment policy statement, families should have a cash policy statement, because events like a divorce or a loss of income are difficult to recover from without one. She warns that with savings rates low, people who face unexpected costs may turn to credit cards charging 25% interest, a return no stock reliably delivers year after year. She recommends automating savings of 10%, setting a reserve floor the way a company would, and building a financial runway of at least three months of essential expenses.

King says families can check their financial health by dividing their savings by their monthly essential expenses to see how many months they could cover, noting that anything less than three months leaves a family operating on thin margins. Ahead of World Savings Day on Saturday, she encourages people to open a savings account and put a little money in, saying saving should come before spending and is a habit rather than an amount. She adds that while markets move up and down, family volatility can be much harder to recover from, making cash essential to protecting the family unit.

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