Financial Preparedness

Since deciding to start prepping and since finding The APN (American Preppers Network),  you’ve hit over the head with how much you have to prep, right?  Food?  Clothes?  Pet Supplies?  First Aid?

But, have you learned how to be financially prepared?

The act of ‘Prepping’ brings one closer to self-reliance.  Self-reliance is the end goal almost all preppers strive for.  That is why one of the first principles of preparedness is frugality.  Being frugal has almost become a modern-day dirty word and completely opposite of the materialistic ‘keeping up with neighbors’ lifestyle we have all become accustomed to.  It means living within our means and not wasting anything.

A popular phrase you will see in the prepping and homesteading community is “Waste not, want not,” if one is not wasteful, one is not needy.  If you are not needy you are self-sufficient, you are prepared.  The more use you find in something the less you need something else.  Like credit, one of the biggest wastes of the U.S. dollar known to man.  The more wisely you use your dollar, the less you need credit.

Americans have grown up on credit, it has been a way of life for us to always be in debt; the banks love it and they reinforce it at every turn by using marketing techniques that border on brainwashing to propagate the ever lasting myth – that we all need “good credit” “without good credit you can’t get a house!” which of course is another part of the big lie. The problem with this is that the only way to have good credit is to go into debt, stay in debt, and continually pay your accounts perfectly on time not ahead of time, and—without adding too much debt or paying too much off. In other words, stay in debt for as long as you can. THIS is what a credit score is based on. It’s not based on how much you have in saving, or what assets you own or how much property you have. Your credit score based ONLY on you staying in debt and paying that debt back on time like a good little slave.

This is opposite of what preppers strive for. The number one priority in your preparedness plan should be to get out of debt and shed the most wasteful thing almost all of us do – making credit card payments and loan payments.  This will benefit you many ways, but the one benefit you will see right off the bat is that it will free up the cash you need to be prepared to face any challenges you have in your future.

However, the feeling that one must have credit in order live is so strong even some hard-core preppers will resist this.  I have heard many excuses, here are the ones I usually hear:

“Why bother paying off my debt? If our economy collapses (or if SHTF), there won’t be banks around to collect my payments.” 

And I have heard some doozies of scenarios made-up and fully believed in to justify one’s particular prepping spending habits or another. From the return of “scorched earth policies” to “violent revolutions” to FEMA camps  – and what happens when those particular disaster scenarios never come to pass? No one has a direct line on what the future holds, no one knows exactly what will happen, or IF a disaster will even strike.

However, after a quick study of history and seven years in the financial industry I can tell you that if the US economy were to collapse there is still a very good chance someone will be around to collect your payments.  The economy may collapse very slowly; it may even take years to collapse.  We may see very hard times, as we did in during the Great Depression.

Even during The Great Depression loan payments still had to be made.  If  mortgage payments weren’t made or if taxes weren’t paid people were still kicked out of their homes even though there was no one to buy them.  Houses were empty and people lived out of their cars (because back then everybody owned their car – what would they do today where hardly anyone ‘owns’ their car).  Don’t be one of those people!  Pay off your debt so nobody can chase you out of your home.

There is a good chance that even if the economy were to collapse completely, records would still be kept (after all everything is on electronic format off site now, even burning places of business to the ground wouldn’t guarantee you a ticket out of paying your bill) and when it recovers everyone will be paying on their old debts again plus interest.  Why worry about this at all?  Pay it off now while times are good.

“I am so far behind in being prepared, I need my credit cards so I can get some of the emergency gear I need – then I will pay off the debt.” 

This line of thinking is exactly why ‘Frugality’ is one of the first principles of preparedness. What good is it going to do you to get all the gear and food if you are still financially dependent on the system?  What happens when your paycheck that you live week to week on is not there?  This is what we call ‘instant gratification’ and it is the mortal enemy of frugality and thrift. The more self-sufficient approach would be to save up for a short time, do without and make do, then when your debt is paid off you go about making extra preparedness purchases with cash NOT credit.  Do not run up debt to get prepared!  It is the worst thing you can do, it would be working against all the rest of your goals.

“Since the dollar will not be worth anything, I would rather have food than money.” 

Food is not a bad investment – over time it has out performed Wall Street in value.  However, a house full of food will do you no good if you are kicked out of your house and have nowhere to go.  There are many ways for debtors to get at what you have, they have whole teams of people devoted to doing it.  Do you have whole teams of people waiting to defend you?  Why put yourself in that situation if you don’t have to?  “Never put all your eggs in one basket,” is another prepping rule of thumb.  The economy may recover, and you might find yourself in a situation where some cash money would be nice to have.  Being financially prepared will help you get there.

Living a debt free, frugal, lifestyle is not always easy, but it is simple and it is way less stressful.  When you do finally reach that debt free point, you will see that it is easier and easier and eventually becomes second nature.  In the upcoming weeks I will tell you how you can start paying off your debt AND still work on being prepared.   Until then – take your credit cards and cut them up, live within your paycheck, and we will go from there.

To learn more on how to become Debt Free and live a debt free lifestyle click here and visit Dave Ramsey’s website.  Dave offers a sort program that will transform the way you think about money and live your life forever.  I recommend Dave’s program because I know it is the best money management program out there and have done it myself.

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