Ten Principles of Preparedness #9 Financial

As one really delves into the 10 Principles of Preparedness, it will become apparent that regardless of the need for prioritization of the various principles they are all inseparable and necessarily make an impact on each other. For example, Mental Preparedness has an impact on all of the others where skill and experience is necessary; Fuel Preparedness is nearly useless if a competence in using the various fuels is absent. Proper Food Preparedness will help to strengthen Medical Preparedness by nature of the quality of foods we consume. As such, when it comes to focusing on Financial Preparedness, a great deal of the heavy lifting of this Principle is actually accomplished simply by implementing the previous Principles. For example, Food Preparedness isn’t just about preparing for a time when food may become more scarce, but most importantly it has a great deal to do with stabilizing our food budgets.  What you are able to purchase today at a great price is still that great price 5 years from now, thus counteracting the negative impact of a cyclical economic culture. This strengthens Financial Preparedness. Learning and applying alternative medical in our life minimizes our exposure to skyrocketing medical care costs, health insurance rates, and the heavy burden of pharmaceuticals. In fact, medical expenses are the number one reason for bankruptcy filings. Clearly if one can get a better grasp on their health, it will have a positive impact on their Financial Preparedness principle. These are the more simpler aspects of this principle though.  Other components of Financial Preparedness tend to be much bigger mountains to climb. First of all, eliminate all debt, even that of a mortgage.  In a world that actually penalizes a person for not having taken on “enough debt” by way of a low credit score, such fiscal discipline may seem quite peculiar to most persons. Some may even feel so strongly about the necessity and virtues in their incursion of debt that they may feel compelled to write hateful and vitriolic messages to me every time I take such a stand. But the indisputable facts are that debt is voluntary enslavement and no mountain of social acceptance and encouragement will change that. Ironically, it wasn’t too long ago that the economy of human slave trafficking was considered to be a political sacred cow in this nation, not to be messed with even in the name of honor; yet somehow we found our way through to where we are today—with the proper belief that enslavement of any kind is wrong and clearly not how mankind was intended to live. Some fiercely believe the notion that their debt is actually a wise financial strategy thanks to the “tax write-offs” which come as a result, when in fact such write-offs are simply paid for through the work efforts of our fellowmen. Oh, Fiddle-sticks! One way or another debt enslaves us and thus is contrary to the honorable state of men made up of independence and self-reliance. Continuing on with the aspect of owing a debt, some believe that having debt is the best way to enter into an economic collapse believing that if such a collapse were to occur that the requirement for the payment of all debts would cease.  Such a belief does not take into consideration the acts of desperate men, men who are accustomed to having great power and influence in the world around them, not being victims and subject to the laws of reality. It doesn’t require much of an imagination to appreciate that under such desperate circumstances, large corporations will find other ways to squeeze payment from their signatories, even if it’s through the aid of our very own neighbors who might easily be persuaded by these desperate corporations to conduct themselves in a dishonorable manner in hopes that their own desperate plight might be abated in exchange for such work.  Desperate people do desperate things and as such we have no reason to believe that any crisis event short of the Lord’s Second Coming would do anything to absolve us of our debts.  My mom always said to me, “if you never find yourself at a bar, then you’re never likely to find yourself in a bar brawl.” I have applied this wisdom to other areas of my life, including in this aspect of Financial Preparedness. “If I don’t owe money to any man, then I’m not likely to find myself subjected to the desperate acts of men to extract that money from me.” Financial independence rarely requires a financial windfall for success, rather we can find freedom simply through the modification of our spending habits. Such discipline adjustments can make a much more significant impact on the strengthening of our financial state than any potential lottery winnings. For example, if an average family of four were to reduce their restaurant eating to just once a month rather than the average of 3-5 times per week, they would save the cost of over 827 quality, delicious, and nutritious meals each year—3,956 servings if a focused couponing strategy is made a part of the weekly grocery shopping. By creating weekly menus based on what we already have on hand and restricting our grocery purchases to sale items only, we can literally fill our shelves 10 times faster on the same, if not reduced grocery budget. If we convince ourselves that we don’t have to see a particular movie the moment it’s released in the theaters, and instead wait until such entertainment costs us a single dollar, then we can save an additional $300 per year. If we learned how to preserve food properly in our freezers, refrigerators and on our shelves, each home in American would save approximately $575 per year by eliminating the average amount of wasted food. Likewise we can all give ourselves a substantial raise simply by working part-time hours in an at-home business and generate an additional income of at least $10,800 per year on average. Focusing on wellness and prevention medicine will save the average family a minimum of $2,300 in out-of-pocket medical costs, co-pays, and insurance premium hikes. Grooming our own dogs will save $780 a year on average and planting our own vegetable garden saves the average family over $1,440 per year, not counting the peace of mind we reap in knowing what’s in our food and the increased amount of vegetables and fruit which will be consumed due to it being more readily available. Between gardening, grooming, cooking, preserving, couponing, and working an at home business, an average of only 18 hours a week can generate a combined income and savings of $18,014.40 per year which translates into a rate of $19.24 per hour.  Unfortunately, most of us don’t value our time and talents anywhere near that much.  Imagine what can happen to our financial strength if we eliminate the constant presence of interest-bearing debts on top of this savings? Another aspect of Financial Preparedness is being ready for any possible “hiccup” in your flow of income and your ability to access and use it to obtain the items you need. One of my hard and fast rules is that I do not keep any more money in the bank than what I need to cover the payment of utilities and any other obligations. Otherwise I use cash, not checks, just cash.  If I need to send a check or a money order and using my debit card is not an option, I will take advantage of my banks “Pay Your Bills Online” option or purchase a money order. I also suggest that everyone have at least 90 day’s worth of expenses set aside in savings and whenever permissible, and pay utilities such as electric, sewer, property taxes, and water bills one year in advance. Yes, these costs are likely to change along the way; but I’d rather deal with a small change in the event of a financial collapse or job loss rather than having those additional expenses on my head. Also, I’d rather make use of the questionable currency we have at present as much as possible before its value becomes seriously compromised.  I also recommend that $500 for each person in your family is set aside in small bills (no bigger than a $10 bill) and kept in a safe place outside of the banks for true emergencies. Rather than allowing persons of unearned trust handle my money and my future, I prefer to invest in commodities myself which I know are essential now and will be essential in the future regardless of what happens on Wall Street. This involves having all of the tangible items necessary in each of the Ten Principles of Preparedness, taking care to be sure that I have enough and to spare so that with these items I might be able to purchase other items which I may need later, via bartering transactions. If I am fortunate enough to have all of those types of needs taken care of then my next step would be to invest in land, paid for free and clear, so that I can use such an asset to farm produce and raise cattle—because I’m quite certain there will never come a day on this earth  in which we don’t need food. After all that, then, and only then, would I invest in precious metals at this present time. Financial Preparedness is about what every other Principle of Preparedness is about—independence from vulnerabilities.  An honest assessment of what your financial vulnerabilities are at present will most certainly lead you to the proper path of Financial Preparedness for your personal needs and wants.