No matter the crisis scenario for which a prepper prepares, the financial side of preparedness is unavoidable. Items are necessary and they are costly. Most of us have very limited resources, but I know that we can still prepare. I’m sharing the lessons my wife and I have learned.
In the first two parts, I talked about budgeting, assessing your financial situation, saving, and now we have begun to talk about the step of living below your means. Saving and living below your means needs to happen concurrently.
Reason For Living Below Your Means
Living below your means serves several purposes. Yesterday, I shared that the first reason is having more income available for prepping and saving for disaster.
The second reason is that living well below your means will begin to teach you how to do without and how to manage with less than you would otherwise have. Depending on how far you take this, you could live as though you were in a SHTF scenario already. Many preppers and homesteaders live without the use of modern conveniences, and they are mostly self sufficient.
Learn To Live Without, An Important Lesson For An Efficient Prepper
Living below your means will help you learn to live without. Albeit how far you take that lesson is a matter of choice. But learning to do without is an important lesson, if we are to be an efficient prepper.
This will also allow you to lower your debt. How quickly this is done is dependent upon a few factors and will vary from person to person. However, the concept stays the same no matter your income level. If you do without more, you will have more resources to combat debt that eats up income.
Some Painful Debt
Let me tell you how I was able to combat some painful debt. A few years back, I took out a car loan for my truck. They sold me on the truck, and I’m still convinced I got a decent price on the vehicle. The problem was that I took out a loan. So what began as a $12,000 loan turned into $22,000 of debt. I felt as though I had no options. I was in a bad way financially and couldn’t keep up with car repairs. This was a hard lesson to learn. I paid $400 per month on this truck for three years. And the payments would have continued if we had not paid it off early. We made some sacrifices elsewhere to be able to make that payment.
When it was paid off, we didn’t go out and buy a new car. We learned how to live below our means. Now, that extra $400 per month that we previously used on the truck loan is available for preparation.
Assessed Preparation Needs and Cycle Each Month From One Prep to the Next
I have assessed my own preparation needs. Each month, I choose one of the top needs or two and then I shore up those areas. I cycle each month from one prep to the next. And with that extra $400, I am able to get a lot more prepping done than I was previously.
Live below your means!
Whittle Down the Debts
The final step in being a good financial prepper is to whittle down your debts. For most Americans, payments on some sort of debt takes up a huge chunk of their monthly income.
The example I gave of my truck payment is just one of many. I have a family member that is a young doctor. She has a mortgage of over $100,000, student loans of twice that, car payments on one vehicle, and a couple of credit cards as well. They have no disposable income. She pays the minimum payment on her student loans and will not have those paid off for many years, at her current rate of payment. Most student loans charge from four to eight percent interest. Likely you end up paying an additional 50% or so of the original loan on top of the original loan, just in interest. That is a lot of wasted hard work, money, and potential preps.
Start Paying Off the Loans and Credit Cards
Once you have assessed your financial situation and set up a budget, it is time to start paying off the loans and credit cards. This is to be done with the other two steps above– live below your means and saving.
Make a list of all of the debts you have. With the lowest balance at the top and highest at the bottom. Pay the minimum balance on all of your debt, except the top on the list. Start paying as much as you can, while still prepping.
This is where some balance is needed. Only you are in your own situation, so only you can know where this line is. But, you should give part of your budget to prepping and part to paying off the smallest balance you have. Additionally, this can change month to month.
If you have a prep that is a bit more expensive one month, that is fine. Simply adjust that month’s budget accordingly. You just have to be sure you don’t go too far one direction or the other.
Discipline To Pay Off One Debt, Then Time To Celebrate
As you are the one that has assessed your own needs and created your own budget, you are the one that will need the discipline to stick to what is needed. But you continue to pay off one loan or card until that first debt is crossed off of your list. Then it is time to celebrate!
Take Amount Spent On First Debt And Add Onto Next Listed Item
Next month, take the monthly amount you would have spent on the first debt and add it onto the next listed item. Include the minimum monthly payment plus what you were paying on the first debt. This will get this one paid off quicker. Once the second debt is paid, you move on to the third, and so on.
You can see how this will create a growing effect with each removed debt. Gradually, you will get all of your monthly payments to disappear. With each debt paid off, you can dedicate a little more of your income to preparing for SHTF and a little more to the next debt.
Once you are completely debt free, you will feel more financially free. You may possibly feel more free and less burdened than ever.
Each month, I have only electricity, Internet, phone, and insurance bills. I could pay the insurance every six months or annually, if I chose to do it that way. The money that I make, I actually get to keep and use! It’s an amazing feeling. With this resource at hand, you will have the ability to be (at least potentially) better prepared.
Our Best Ability To Be A Prepper Comes When We Owe No One A Single Dollar
No longer do you have to worry about losing a job and having the debt collectors knocking down your door. Your voicemail isn’t full of collection notices or late notifications.
Truly, financial freedom comes in being able to say, “I owe no one a single dollar.” And our best ability to be a prepper comes at that same moment.
Finances Should Be Ally of Your Prepping and Not the Enemy
In conclusion, whether you believe being debt free is the best option for you or not, the principles mentioned here will undoubtedly make you better able to prepare for your flavor of doomsday. If you will budget, assess your financial situation, save, and live below your means, these things combined will free up a surprising amount of resource. Your finances should be the ally of your prepping and not the enemy.
Being a financial prepper will take your prepping to the next level!
SurvivalBlog Writing Contest
This has been another entry for Round 78 of the SurvivalBlog non-fiction writing contest. The nearly $11,000 worth of prizes for this round include:
- A $3000 gift certificate towards a Sol-Ark Solar Generator from Veteran owned Portable Solar LLC. The only EMP Hardened Solar Generator System available to the public.
- A Gunsite Academy Three Day Course Certificate. This can be used for any one, two, or three day course (a $1,095 value),
- A course certificate from onPoint Tactical for the prize winner’s choice of three-day civilian courses, excluding those restricted for military or government teams. Three day onPoint courses normally cost $795,
- DRD Tactical is providing a 5.56 NATO QD Billet upper. These have hammer forged, chrome-lined barrels and a hard case, to go with your own AR lower. It will allow any standard AR-type rifle to have a quick change barrel. This can be assembled in less than one minute without the use of any tools. It also provides a compact carry capability in a hard case or in 3-day pack (an $1,100 value),
- Two cases of Mountain House freeze-dried assorted entrees in #10 cans, courtesy of Ready Made Resources (a $350 value),
- A $250 gift certificate good for any product from Sunflower Ammo,
- American Gunsmithing Institute (AGI) is providing a $300 certificate good towards any of their DVD training courses.
- A Model 175 Series Solar Generator provided by Quantum Harvest LLC (a $439 value),
- A Glock form factor SIRT laser training pistol and a SIRT AR-15/M4 Laser Training Bolt, courtesy of Next Level Training, which have a combined retail value of $589,
- A gift certificate for any two or three-day class from Max Velocity Tactical (a $600 value),
- A transferable certificate for a two-day Ultimate Bug Out Course from Florida Firearms Training (a $400 value),
- A Three-Day Deluxe Emergency Kit from Emergency Essentials (a $190 value),
- A $200 gift certificate good towards any books published by PrepperPress.com,
- RepackBox is providing a $300 gift certificate to their site.
- A Royal Berkey water filter, courtesy of Directive 21 (a $275 value),
- A large handmade clothes drying rack, a washboard, and a Homesteading for Beginners DVD, all courtesy of The Homestead Store, with a combined value of $206,
- Expanded sets of both washable feminine pads and liners, donated by Naturally Cozy (a $185 retail value),
- Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security, LLC,
- Mayflower Trading is donating a $200 gift certificate for homesteading appliances, and
- Two 1,000-foot spools of full mil-spec U.S.-made 750 paracord (in-stock colors only) from www.TOUGHGRID.com (a $240 value).
Round 78 ends on September 31st, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and that articles on practical “how to” skills for survival have an advantage in the judging.