Position Yourself for Financial SHTF – Practical Steps for Paying Down Debt and Saving Money!

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We’ve all been expecting it!  In fact, some of us are baffled that it hasn’t happened already. Many who are paying attention to the global economy expect a time when this country and possibly the rest of the world experience economic SHTF.  One thing though, no one exactly knows what it will look like when the proverbial economic balloon goes up!

As a result of not knowing, we could stress and worry.  Some of us prep food, water and supplies.  But besides prepping the basics, one of the things we should do is position ourselves to be in the best spot possible for a financial SHTF scenario.

To be clear here, a financial SHTF scenario doesn’t have to be the meltdown of the global economy.  When that happens, everyone will be in the same boat and those who have made an effort to position themselves will fare better.  However, people find themselves in financial SHTF scenarios everyday when they lose their jobs, have a medical emergency and have no insurance, lose a loved one who is an income earner, etc…  Hopefully, the information in this piece will provide relevant information to help anyone prepare for a future financial SHTF scenario.

Two Economic SHTF Scenarios – Two Extremes

When preppers think about SHTF, we tend to think about the kind of world you read about in dystopian novels.  JWR’s Patriot’s is a book that many preppers are familiar with.  In the book, an economic crash sends the USA into the world of The Walking Dead.  Bank holidays, credit card and ETB freezes, Marshall law, Biker Mice from Mars, The Stay Puft Marshmallow Man, dogs and cats living together…This is an extreme view. Could an economic crash bring the collapse of the USA?  I don’t know.  I think TPTB already have a plan in place if they see the balloon going up.

The other side of this extreme view is something I first heard Jack Spirko talking about back in the day, a slow economic spiral downwards.  In this scenario, things start to cost more and your earnings don’t go up.  Your money doesn’t buy you as much as it used to.  You stop going out to eat or to the movies as often because it’s so expensive.  You hold off on making big purchases.  You don’t have discretionary income like you used to have.  You start watching your finances closely because any hiccup can cause pain.  Your quality of life spirals down.  You stress.  Your spouse stresses.  Your kids feel the stress.  You look back and long for the “good ol’ days.”

These are two extremes, of financial SHTF.  We’ll probably wind up somewhere in between.

Where Do We Start?

In a recent poll on Prepper Website, I asked, “If you had an extra $500 right now, what would you do with it?” 28% of those who responded (132/478) said they would pay down debt!  (“More food storage” came in a close second, but that is another post.)

I would say that these respondents have the right idea.

Think about it.  If the economic balloon goes up, money (paper money will be used for a while, even in a JWR Patriot’s type crash), will buy less and less.  The more money you have freed up to make purchases, the better your overall position will be.  The biggest step in positioning yourself for financial SHTF is to get out of debt!

Getting Out of Debt Is Too Hard!

Yes, if getting out of debt was easy, everyone would be debt free.  It takes determination, discipline, going without sometimes and creativity.  But when you get debt free, it is the best place to be!

Years ago, I taught the Dave Ramsey course, Financial Peace University at my church.  My wife and I had already started getting out of debt, but FPU helped a lot.  I don’t agree with Dave Ramsey on everything.  In fact, I’m a little disappointed that he’s not warning people of what could possibly become of our economy.  He is still pushing 401K’s and mutual funds.  But, his advice and system for getting out of debt is very helpful to anyone wanting to get out of debt.

I’ll post a video of his 7 Baby Steps plan at the end of this article, but Dave tells you exactly how to do the debt snowball in the video below.  Notice the discipline and determination part!

 

Ways to Cutback and Find Money for Your Debt Snowball

One of the things that easily sidelines people when they try to get out of debt is finding money to add to their debt snowball.  If you just use what comes in, your current income, it might take longer than you like and you can wind up getting discouraged.  The trick here is to live way below your means.  And when I say below…I mean below.  The way to do this is to make a budget.  Just like you have a bugout plan or food storage plan, you need a budget plan to help you stay on track and manage every dollar that you bring in.

Back in the day, I created an Excel spreadsheet that would make changes automatically so I could see exactly what was coming in and going out.  I’ve attached a version here, using Google Sheets.  I would download this copy and open it using Excel. Or you could do it old school if you like.  Remember, you don’t want to have any money left over at the end of the month.  You want all your money accounted for and “working” for you.

Other Practical Ways to Cut Costs and Save

After you make you budget, you need to find other ways to bring in money.  Many people start having garage sales, work a part-time job, and find ways to save.

In my years aggregating articles for Prepper Website, I have linked to some great articles with great info. on being frugal and saving money.  I want to share some of those great ideas here.

On the Bacon and Eggs website, you can find an article that shares 114 Frugal Money Saving Ideas and Tips.  Here are a few of my favorite ideas…

8. Use cold water in your washing machine.  It’s the action in the washer that cleans the clothes

 

9. Unplug anything that is sucking “ghost power”  We’ve got a power strip that we can flip on and off when we need to.

 

20.Craigslist, Freecycle, Penny Papers, Thrift Stores and yard sales all can provide most things you are looking for.  Why buy new when gently used is so much less expensive?

 

26. Keep your freezer full. If you have to, put milk jugs or 2-liter bottles of water in the freezer.  It’s less expensive to run a full freezer than an empty one.

 

35. Open the curtains/drapes on the sunny side of the house during the daytime and close them on the shaded side(in the summer I reverse that). This works very well on sunny, non-windy days. This allows me to use natural light as well.

 

38. If you are considering making a big purchase why not try waiting 30 days and then see if you still feel the need for the item.  I find myself sometimes not needing something nearly as much as I thought I would three or four weeks later.

 

46. When running errands, try running them at “off peak times”.  You’ll be able to save time and gas by not having to wait in 5’o’clock traffic.  You’ll spend less time looking for a parking spot too!

 

61.  Check out the weekly ads in your area BEFORE you go shopping and use it to help with making your list.  Once you get your pantry stocked up you can use this “tip” to help you prep and save money while you are doing it.  The idea is to try and NEVER buy anything that isn’t on sale or doesn’t have the best bang for the buck so to speak.

 

68.  Compare unit prices.  I have found this to be really really helpful.  Most all stores show the price per ounce. Lot’s of times what you “thought” was a good deal really isn’t at all. Compare the per ounce costs of each item.  You would be surprised at how many times “bigger is not always better”.

 

73.  When you find something that you use regularly on sale – Stock up and buy as much as you can afford to. You know you will be using it later on and prices are rising fast these days.  Store what you eat and eat what you store.

 

77.  Stay away from convenience foods.  You can make most of the same things at home for half the price.

 

87.  Go “meatless”  one day a week.  We love meat. But face it, it’s expensive.  We like beans around here so I’ll cook up a pot with some rice and cornbread for dinner sometimes.  Makes great leftovers as well.   Use the leftovers as a side dish during the week.  Another thought is to have “breakfast for dinner”.  Pancakes and eggs for dinner…. oh my!

 

89.  If you don’t know how to cook it’s time you learned.  Cooking from scratch saves tons of money and it’s just plain better for you.

 

111. Invest in a thermos and take your coffee to work with you.  With the money you save by not buying $5.oo coffee’s every day you could easily afford a nice home brewed coffee every day!

To read the rest of the article – click here.

Over at Modern Survival Online, a guest poster Gilfner, shares “Ways We Are Creating Money in our Budget for Prepping” Here a few good ones…

TV – We only pay for streaming Netflix, $7.99/mo.  If you are serious about prepping, you don’t want to be stuck on the couch.  No need for cable/satellite or the $40 plus per month bill.  Spend the extra time getting stuff done and the extra money getting stuff to do it with.  The deals for bundling services aren’t that good.

 

Our cars are all paid for.  As much as I lust after the new cars, I am doing just fine with the ones I have.  But it’s tough to find the balance between good running cars that don’t cost a ton & thrashed cars that might as well have a monthly payment to keep them on the road.

 

Paying attention to sales.  Not everything is a good deal.  Not everything at Costco is a good deal.  Last month we found that the source we had for the pre-packaged Augason Farms hard red wheat went up in price dramatically.  We realized that with some work, we could get 25lbs bags from the LDS Cannery and bucket it ourselves for much less.

 

For construction projects around our place, we find that checking the cull bin at the Home Depot or Lowe’s nets us a lot of wood for less.

To read the rest of the article – click here.

Survival at Home shares “45 Ways to Save Money on Your Monthly Bills” Don’t miss these…

4- Eliminate drafts by using inexpensive expanding foam or caulk to fill cracks and small holes around windows, door frames and exterior walls where cold or warm air typically escapes. Look carefully around where pipes and wires enter and exit your home.

 

23- When it comes to credit cards, the easiest thing to do is just stop using them. If you can’t afford to pay cash for what you need, you probably don’t need it. Of course there are emergency situations, but those are likely to be few and far between. Don’t use your cards for anything you can eat or wear, and avoid using credit cards to buy “wants” such as a new stereo or TV. Wait until you have the money to buy it.

 

36- Do some price comparisons on your auto insurance. Consider changing your insurance policy to one with a higher deductible. If you have an older vehicle you might even consider switching to a lesser coverage. Decide if the monthly payment for collision insurance is worth paying for on your older vehicle.

 

45- Negotiate all of your bills. Call each company at off- peak times (such as early morning) to discuss lowering your rates. Companies are less busy and more likely to spend time negotiating with you. It absolutely never hurts to ask.

To read the rest of the article – click here.

Daisy Luther, at the Organic Prepper always has good advice on cutting costs and living below your means.  She shared in her post, The Austerity Diaries, some of the changes she and her family made to get through some hard times.  The article is from Jan. 2014, and Daisy is still alive and kicking.  So, you know it worked for her and her kids.  Check out her article, The Austerity Diaries and also the link at the top of her site dedicated to being frugal.

I also found some great advice in an article on Survival Blog called, Seventy-Five Ways to Save Money for Prepping.  Here are a few…

Don’t let a screaming child (or teenager) rule your finances. Learn to say “no” and mean it! The same goes for teenagers begging you for the latest and greatest “I Whatever”. The proper mantra should be “get a job and pay for it yourself”. You’ll thank me later. This has been a public service announcement.

 

Log all expenses, and keep a continual tracking system in place. Know where the money goes. (FYI: You don’t have to use credit cards like the author suggests. Saving receipts and plugging in the figures later works just as well for the OPSEC minded.)

 

“The Return of the Clothesline” is now playing at a theater near you. Start using a clothesline or drying rack and you’ll save energy, prolong the life of your clothes, and your house will be quieter and cooler. Oscar Awards all around!

 

Sewing will be a great skill to know and barter with post-SHTF. Many times articles of clothing will go unworn when buttons come off or a seam comes loose. It is a shame to let nice pieces of clothing go to waste or kids outgrow them without getting as much use from them as you can. It also comes in handy to have a sewing machine so you can take clothes in and let them out without always having to buy new ones.

 

Check Craigslist for free plants; you’ll almost always find them!

 

Shopping online? Never leave the coupon code box blank again! Google the name of the store and add the words “promo code” to the search bar. Sites like RetailMeNot.com offer free coupon codes for just about any product you’re shopping for.

 

Learn how to do basic home repairs and maintenance. Home Depot offers free classes from the Home Improver Club. You will learn important skills and save money at the same time. That is, of course, unless it’s a major project. You really don’t want to make any mistakes that only a professional can repair (and will charge you accordingly).

 

Stocking up when the price is low is the key to saving. Having a price book will really benefit you in the long run. Find what works for you– coupons, shopping at several stores, or shopping online. A combination of all three is my technique of choice!

To read the rest of the article – click here.

Brown Thumb Momma has a short article with some good advice and links.  “In 20 Things I do to Save Money,” she shares…

I make my own cleaning supplies instead of buying them. As an added bonus, this means the kids can help clean and I don’t worry about them being exposed to weird chemicals.

 

We make breakfasts ahead of time so nobody has to stop for fast food on the way to work/school.

Check out the other 18 tips! – Click here.

Remember, doing a lot of just a little bit, will save a ton and make a difference.

What About Precious Metals?

There are many out there in the alternative media space that believe when/if the economy crashes, they will become the next millionaire on the block because they have invested in precious metals.

I’m not a financial or precious metals expert.  But what I’ve gathered from trying to take in all the information out there, is that precious metals are a hedge against inflation. Could there be a time when the Biker Mice from Mars invade and our paper money is worthless and all that anyone will exchange or do business in is precious metals?  Could be.  Should you own some precious metals?  Yes, probably.

Although gold would be smaller and easier to physically move, silver might be your best deal right now.   Silver is very undervalued compared to what it costs to come out of the ground. I’m not going to go into a lot of specifics here.  I think that Michael Snyder of the Economic Collapse Blog did a good job of explaining all of this in a recent article, Why Investing In Silver Is Vastly Superior To Investing In Gold Right Now.

Conclusion – Time is Ticking

I like my life.  I’m comfortable.  I don’t like thinking that there is a future out there where I won’t be able to afford some of the things that I enjoy, much less, not be able to afford some of the things that are necessary, like medicine and medical procedures because they are too expensive.  I don’t like what this all implies for my kids!  But, that is why we prep!  That is why we sacrifice a little now because we see what could possibly be in the future.  Dave Ramsey has a saying that goes, “Live like no one else, so later, you can live like no one else.”  Time is ticking, get your finances in order!

For more ways to save money, check out the Frugal Living and DIY pages on Prepper Website!

You can also check out the TAG Cloud for saving, savings and frugal.

Peace,
Todd

Peace,

Todd

This article first appeared on Ed That Matters.

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Todd Sepulveda

I'm the owner/editor of Prepper Website, a DAILY preparedness aggregator that links to the best preparedness articles on the internet. I'm also a public school administrator and a pastor. My personal blog is Ed That Matters, where I write about preparedness and from time to time, education. Connect with me on one of my social media outlets below.

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2 thoughts on “Position Yourself for Financial SHTF – Practical Steps for Paying Down Debt and Saving Money!

  1. Ross

    I have to disagree. I believe that paying down debt now in preparation for an economic collapse is one of the worst things you can do with your money. It is simple, and it feels comforting, but it is a waste of money.

    In my experience with economic collapse, growing up in the eastern block, and from looking at every other economic collapse around the world, and even the US, paying down debt in anticipation of an economic collapse is not a good idea.

    One of the first things that happen when there is an economic downturn is devaluation of the currency. As mentioned in the article, the same goods start to cost more and more of the same currency. We have seen mild examples of that in the US, but during an actual economic collapse, like what I witnessed in Europe, the devaluation is extreme. An amount of money that one day could buy you a car, a month later will not even buy you a loaf of bread.

    I know the instinct is to pay off your debts now, so you don’t have to deal with them when such horrible things are happening, but we have to remember that the exact same devaluation is happening to debt as well during such times. A $100,000 debt which now may be the mortgage of your house and represents three years of income, after an economic collapse, can be the equivalent to the cost of a pair of shoes. If instead of paying off your debt now you had put a fraction of that money into some tangible goods (shoes, etc), you would be in a much better place.

    In much milder scenarios, which I wouldn’t call “financial SHTF”, like the recent housing bubble in the US, it is the people with the most debt that ended up ahead. The people who were paying their mortgages have received no help in any way. If on the other hand you had a ballooned up mortgage that you failed to pay, all sorts of laws were passed to force refinancing and debt forgiveness. A friend of mine now owns his house outright despite a $500,000 mortgage because the bank couldn’t produce the note to the court.

    I know it is more stressful, and it can be burdensome to deal with uncertainty, but in most cases where we are anticipating an economic collapse of some degree, debt can actually be the best thing to have.

  2. Jay

    Meatless days always crack me up. I grow our meat, so it’s not an issue for us. I do stock up on my “foods’ feed” when I get a good deal (primarily hay). Many forget to think outside the box and GROW food, stop buying it!!

    I actually have people get miffed at me because I won’t sell them meat (beef, chicken, turkey). It takes lots of work and it tastes better than what is in the store (plus I know what it ate and how it was treated). I’ve put out offers of “if you help me grow/milk it, you can have some” and no one wants to help, they just want to buy (because its easier!!)

    Freeze or dehydrate or can foods…..learn how NOW. Learn to grow food NOW…..what you like to eat. Start small and work hard at it. It’ll save you money (not time) and you’ll enjoy the simple things.

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