By April 24, 2013 Read More →

Financial Preparedness – Prioritizing a Monthly Budget

Financial Preparedness means, you are as ready, financially, as you are well supplied for any disaster that may head your way.  All the supplies in the world won’t help you if you are lambasted by your bank or the IRS and evicted from your home because you couldn’t make ends meet and pay your bills.  Out of all the things we prep for, the least likely of them to happen, always seems to be the ones I hear about people preparing for.  Those black swan (or SHTF) events are a real possibility and worthy of preparedness, but in the scheme of things they are not likely.

The chances of a second Great Depression are far greater than the much talked about single day economic collapse.  A prolonged depression may in fact lead to a collapse eventually, but it could last a long time.  When we “prepare”, its not just of those really bad single day disasters, it’s for ANY emergency, including a job loss or economic depression.

If the above scenario were to take place; you would STILL have to pay your bills.  If you don’t, I can almost guarantee you – there will STILL be plenty of people around to haul your butt into court and either repo your property or put a lien on your house.  If your creditor or bank goes under, someone else will buy or assume the debt, maybe even the government.  Some of the last good paying jobs around will be that of debt collectors and repo men.

The only way you can prevent this from happening, in good times or bad, is to pay off your loans and adopt a debt free lifestyle.  An economic disaster is NOT your ticket out of paying your bills.  Getting out of debt takes hard work and discipline, but the pay off in financial freedom and ultimate preparedness is great.

As you start working towards your debt free lifestyle, your first step can be setting up a monthly budget as described in my previous article here.  Setting up a monthly budget is important because it is taking control of your money.  “It’s making your money behave” as Dave Ramsey likes to say.  A monthly budget is you telling your money what to do, rather than you sitting back at the end of the month wondering where the heck it all went.  It’s a plan, and success always comes quicker with a plan.  People hear the word “Budget” and they think “no fun” and “I can’t buy my preps”, but it doesn’t have to be like that.  There are tons of ways to prep while on a budget, and when you do get out from under that debt think of how relieved you will be, think of how free you will be!

Remember, there is no point in doing this if you don’t stick to it.  Your monthly budget should be done at the end of each month, prior to the next one starting.  Make a rule that if you don’t write it down, you don’t spend money on it.  This is the ONLY way to prevent that ‘lost’ feeling one gets when you sit down to pay bills and wonder where all of your money went.  People who budget know EXACTLY where their money goes and what it is doing.

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More Monthly Budget Details – Prioritizing:

  • When you are setting up your budget, pay your DEBTS first that allow you to survive before other stuff, starting with your mortgage.  Your mortgage should always have top priority over other bills like cable or internet.
  • Your next priorities should be things like power, and water.  What you are doing, in a sense, is giving priority to things that will keep you alive and safe before you are addressing things that keep you comfortable and entertained.
  • Once money is allotted for those bills, then designate an amount for food in the form of groceries.
  • If you owe any taxes these should also take top priority – the IRS is the most powerful debt collection agency in the world and they answer to no one.  Make sure you take care of your taxes.
  • Then pay the rest of your bills like auto loans, credit cards, furniture loans or whatever the case may be, but if there is no money for them then there is no money. At no point is it ok to starve, or miss a payment on your mortgage because a credit card payment is due. If there is not enough money to pay those lesser bills then you will have to increase your income, or wait until you do have money (and yes, suffer the consequences of those actions).
  • Next, before you start paying extra on any bills, set up a “saving account” somewhere for an emergency fund.  And devote as much as you can to it, even if its only $10 a month.  Start with a goal of one month’s income (whatever your household makes in one month) and work your way up to six months.
  • After your bills are paid, your home is stocked with food for the month, and you’ve sent a little money to a savings account, then move one to extra activities for kids (YES, your bills and savings take priority over your kids’ entertainment and enrichment), cable, internet, and lastly “eating out / shopping” if you have the funds to do so.

Preppers will often scrap those last three categories and opt to use that money to prep.  Most seasoned preppers have learned important lessons like prioritizing, sacrifice, and responsibility.  We have learned that our family’s safety and security is more important than going out for some sushi on a Friday night or that football package on TV.  It doesn’t mean that we don’t have any fun at all – it just means we’ve focused our efforts and resources into what is important for us.

Articles on Budgeting:

Free Work Sheets for Setting up Your Budget:

Dave Ramsey’s Financial Peace Program:

I love Dave Ramsey’s program to financial peace.  After seeing the ins and outs of the financial industry for 7 years, I can vouch for its effectiveness – and for Dave’s wisdom.  While not a prepper himself, Dave’s program is right in line with the principles and values of preparedness.

This series of articles are presented from my point of view with seven years of financial industry experience.  They are, in a sense, my opinion and should not be viewed as legal or financial advice.  My solutions do not fit every situation, so I highly recommend anyone facing money troubles should seek a qualified financial advisor or counselor before acting.  Again, Dave Ramsey’s team of financial coaches is the only place I personally would seek out such help for myself.

About the Author:

Stephanie is a writer for the American Preppers Network, a small local paper and for her blog, The Home Front and was featured in Marie Claire UK in the October 2012 issue that featured women preppers. She is also the credited writer of "Emergency Bag Essentials (Swatchbook): Everything You Need to Bug Out" released in August 2014 and available on "I write articles based on my own experience with emergency preparedness, self-sufficiency, homesteading, food preservation and life around the farmstead. I grew up in a very rural area where I learned to garden, the art of canning, to hunt and fish, and to raise my own animals for food. I also spent 6 years volunteering for the local county Search and Rescue group where I learned a variety of survival skills and a little bit about law enforcement protocol. " "As a general rule of principle I do not write articles about information that I have only read - if I am writing about something it's because I have done it myself and gone to great lengths to provide you with the facts meshed with personal experience. My alter egos are as an full time mom, amateur photographer, and backpacker." Stephanie's past APN articles are featured below on several pages. To connect with her --> click on one of the many little square social media buttons below!

6 Comments on "Financial Preparedness – Prioritizing a Monthly Budget"

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  1. Once upon a time we were saving money out of our checks for retirement, now we’re saving money to survive. Somethings definitely wrong. Anyway, budgets never worked for me and I would suspect that if you’re having many of the problems that a budget may solve you’re probably not going to be willing to use one!

  2. True. But I have faith people can change when they are ready. A budget will not solve ALL your money problems but its a big step in the right direction. This is only the first part in a series of steps one can take to help get themselves out of debt and financial trouble. 

  3. Heather says:

    I am not a huge fan of a monthly budget but it is helpful to do so in order to free up some funds by making cuts to your monthly expenses.  I use an interactive online tool that makes it a bit less painful so feel free to check it out!

  4. DR says:

    Think of a budget as your map. It may still take you a while to get out the “woods” but at least you have that tool you need to get you where you want to go.

  5. Very good advice DR  😉