Many individuals who want to be wise with their personal finances save up a certain amount of money and hold it in a checking or savings account and call it their “rainy day fund.” These are emergency funds that are tapped into only if absolutely necessary.This is a terrific idea to have a backup just in case things turn horribly bad all at once. In addition to being a wise long-term idea, it also helps you keep your discretionary spending in check because you have less to be spending.

The sad news is that many Americans who have setup things such as rainy day funds still are unable to make it in today’s economic environment because things have gotten worse than they ever dreamed. Some families have had the bread winner lose their job and others have had both sources of income lose their job. Most companies that lay off employees pay some sort of money to them for a few weeks, but that is far less than what is necessary for most families.

What we are seeing right now is making history, and not in a good way. The economy right now is bleeding jobs at an alarming rate while the cost of many necessities continues to rise. The squeeze on the average middle class family is unquestionable. When financial planners tell someone to plan for the worst case scenario the fact of the matter is most people wouldn’t have ever thought it could be this bad.

As wise and frugal consumers you need to understand that being prepared for the worst case scenario now is different than it has been in the last couple of decades. The uncertainty regarding jobs and the overall economy is unprecedented since the Great Depression and things show no sign of easing anytime soon. Alter your worst case scenario to be more in line with the reality of today’s economic picture.