5 Steps To Financial Survival
January 30, 2012
Stop Borrowing. Stop the bleeding. Regardless of your current debt, you must (I mean, must) stop sinking further in debt. You will not be able to change anything until you stop spending borrowed money. Period. It is THE most important thing to do first.
Trim Your Budget. Simplify the budget analysis by being honest with yourself. Chances are that there are only one or two categories where you tend to break the budget. Think about it. You know what they are… Maybe you go out to eat too much. Maybe you buy too many clothes. Maybe you spend too much on gadgetry. The point is, instead of over-analyzing your budget, simply STOP spending too much on the categories you know to be your weakness. It takes will power.
Save. Even though there is relatively little interest paid on cash savings these days, this is no excuse not to save. As you begin to save a few dollars here and there, your motivation will grow as your cash stash grows. Instead of creating more debt, you will be creating more cash! Don’t spend every extra dollar on paying off your debts. Instead use some of it to build up a savings of cash.
Expect the Unexpected. A common area where people tend to go into debt is in the category of emergency expenses. This is where having a savings of cash will provide insurance against falling back into debt. Expect things to happen, such as the unplanned car expense or home appliance repair or replacement. Unexpected expenses ALWAYS happen. Save for them.
Plan for Future Expenses. Rather than letting known future expenses catch up with you, which often send people back into debt, plan instead for them. Use simple math. If you know that you will likely need a replacement vehicle in 2 years, and you are planning to purchase a used-car for $7,000, then $7,000/24 months equals nearly $300 per month that you need to save ahead of time. Budget for it. Money to purchase things that you will need to replace or purchase in the future WILL NOT fall into your lap. You must save for it, or go into debt when you need it.
I believe that one of the biggest problems today with those that are in debt is the lack of understanding that you cannot simply spend all of your paycheck or income each month (or week – whatever). There will always be significant expenses that will unexpectedly slam into you throughout life. You must plan for this by facing the reality that you need to set aside a portion of your take-home income for the future. This notion goes against the programming of ‘the system’, which deluges you with advertising and pressures to buy-buy-buy, however it is a false notion, one that will make you a slave.
Similar Articles You Might Enjoy:
Understanding the Quantity of Cash Money
October 5, 2011
As cash money and what you can tangibly hold in your hands disappears and is replaced with digital numbers on statements or computer screens, so too is the fading understanding of the value of money. Too many people are overwhelmed by numbers and don’t see something as being gone unless it was physically there beforehand. Case in point, the elected leaders that still cannot grasp the concept of an enormous debt that is just too much for them to handle.
To those who are responsible, and understand debt and the frugal concept of spending too much, using credit is not much of a problem. To those that spend excessively and don’t see or understand responsible debt management, this can be a very big problem. Credit limit or debt ceiling is a notion that lots of people still don’t understand.
Credit has its place in society, as it enables people to own a home, businesses can borrow to expand, and other responsible uses. Frivolous abuse of credit however destroys lives and makes paupers out of potentially successful individuals. One of the main problems with credit for the abusers, is that the quantity of money is not seen or felt, or understood.
There are some people who have managed to get out of debt and balance their finances without credit counseling in very remarkable fashion by getting back to the basics of money related transactions by using cash money for almost or all of what they purchase and pay for. This seeing and touching currency helps them retrain their minds to what they were hopefully taught as children, that you buy only what you can afford.
Here’s a plan to start the road to recovery and someday be debt free for those people who cannot to seem to stop the credit monster from consuming their lives.
First when you get your paycheck, withdraw it to cash (or as much as you can). A checking account and or debit cards will work for some, but many still do not see what they actually have unless it is right in front of them. Many people also still bounce checks because of improper accounting practices. Instead, use cash money for your living expenses. It is there to work with and to be fully visible and understood.
When paying bills use money orders. Money orders only cost around a dollar or so. Not only do you see and feel just how much the bills actually cost, which can help and motivate you to cut back, but you are using what you actually have to work with and not building up debt. The cost of the money orders and inconvenience of mailing them will be vastly made up in the long run.
Get rid of the services that automatically take out money from your bank accounts that are subject to change. The SET monthly bills that are the same each month are not a bad idea, as they leave you with a set amount to work with. However things like utility bills that do change, or phone bills that can change vastly, pay them using money orders. Helps to curb over usage of something that can be cut back, like over electric use for example.
Pay for everything when you go grocery shopping and other shopping with cash. People will often get something that they feel they need at the time to later find out they should not have. Take only the cash that you will need, no more. Having a set limit of cash in your pocket is an excellent way to purchase only the necessities. This teaches people to look for the best prices to (and to add).
Avoid going back to the bank for withdrawals of more cash unless you absolutely must for items or bills that are strictly pending and important. It will be difficult at first to go lean with spending, but after awhile it should kick in and become more of a habit. This is the most difficult part of it as it takes willpower to go without some of the items that people have taken for granted and accustomed to, that they don’t really need.
Do not use the credit cards that you have for any reason other than emergencies. Pay the balances on these credit cards with money orders each month. If you can pay more than the minimum, that is good, if you can’t, at least you will not be adding to it each month.
If anything catastrophic happens in the world, cash money may be the ONLY way to purchase anything as the credit cards might be useless, methods of electronic communications may be down, and banks may be closed. There is an advantage to having cash on hand.
One little advantage to paying with cash is all the coins that you get back. Putting these coins in a jar until it’s full is a great way of saving some fun money to splurge with, or maybe applying it to pay off some of your debt. Coins add up surprising quickly.
This overall method WORKS, I have seen people go back to the days of using only cash money and they get a grip on their finances because they see and feel real currency. While currency is fiat and does not really have much to back it up, it is still physical and can be held. Even the old time Monopoly game works with fake currency but teaches the concept of careful buying and selling. People understand something better when they can see it. Cash money is certainly not the only solution for those plagued by overspending and credit, but it sure helps as an excellent foundation for people getting a much better visual hold on what they actually have to work with.
Thanks to ‘Be informed’ for some of the ideas and statements made in this article.
If you enjoyed this, or topics of current events risk awareness or survival preparedness,
check out our current homepage articles…
Similar Articles You Might Enjoy:
10 Things To Do With Your Money
August 13, 2011
Here are a few ideas of what to do with your money, from a practical-preparedness-frugal point of view.
(Not all inclusive, of course)
Ground rules:
Do not spend into debt. Spend only what you have available to you.
1. Set aside the money that you need for the bills that are required to be paid. This requires that you figure out first, what your monthly bills total. That means figuring out a budget. It’s not very hard to do. The point is, first set aside the money that needs to be paid on your bills, and then consider moving to step #2. Hopefully you have some left over after the bills.
Tip: If your cable costs $80 a month, see if you can do without some of the premium channels and instead get it for $60 a month. Cha-Ching!
2. Save an amount of your leftover money, until you have enough cash saved up to hold you for a time, in case of an emergency, or if you lose your job. 6 months worth of cash to cover bills is an excellent goal. Start small though – set a goal for 1 month worth of bills. Then 2…
Tip: Don’t feel as though you have to devote every extra penny each week to building this goal, unless you want to use all of it for that. For some, it is motivating to witness a pile of money growing.
Tip: It is much more motivating to take the cash money that is leftover and keep it at home in a safe, instead of putting it all in the bank. Actually ‘seeing’ the pile of cash grow is more motivating than watching the electronic numbers of your bank account. Besides, interest rates are so low right now that you really won’t get much of anything in a typical savings account.
3. Use cash for the groceries and things that you normally purchase each week, instead of a debit card or writing a check. When you use cash, it is very ‘real’ when you hand over the money to the clerk. Trust me, it makes a big difference and will help you to control yourself.
Tip: If your paycheck is direct-deposited, withdraw cash money from the ATM each week in the amount that you normally would spend with your debit card at the grocery store, etc…
4. With some of your leftover money, purchase extra food items that are a regular part of your diet. Food prices will only continue to go higher as the dollar continues to be debased. You cannot go wrong by buying more food now rather than later. Start with a goal of 1 month extra food, but build towards 3 months, then 6 months… It’s not that hard to do, and you will feel good about it when you look in your cupboards or pantry and see all that food.
5. Think about the consumable supplies that you go through each month and purchase more of them as extra storage. Things like toilet paper, soaps, trash bags, coffee filters, plastic wrap – aluminum foil, etc…
6. Productive tools and supplies that will assist you while growing and managing a home garden from germination to production.
7. Tools and supplies that will assist you while repairing things around the house, or purposed towards building or cobbling together solutions around the home and yard.
8. Items that will help provide security for your person, family, home, and property.
9. Extra gasoline, propane, diesel, etc… for your vehicle and fuel-powered items. Purchase proper storage containers (e.g. 3 or 5 gallon gasoline jugs). Know the number of miles that your vehicle gasoline tank will get you, and realize that a 18 gallon tank will require six 3-gallon containers, which may be more than you first thought (the number of containers).
Tip: Use an additive like ‘Stabil’ to prolong the life of gasoline in storage.
10. Splurge. So long as you are, for the most part, smart with your money, it is important to occasional splurge on self-indulging items or ‘toys’. Treat yourself once in a while. It is important.
If you enjoyed this, or topics of survival preparedness or current events risk awareness,
check out our current homepage articles…
Similar Articles You Might Enjoy:
Debt Free Living, A Simple Concept?
March 3, 2011Sounds simple, right?
Living debt free is a simple concept: Spend less than you earn, and accrue no debts. Pay as you go. Sounds simple, right? So, why are so many of us unable to do it? The financial experts tell us to “live within our means,” give us plans to get out of debt, and help us develop budgets. But in the end, most of us inevitably find ourselves back in the hole, trying to dig out. Why didn’t it work? Why, after paying off all of our loans and credit cards a year ago, are we facing mounting bills once again?
Permanent lifestyle changes
Going back to the basics, staying debt free happens when you spend less than you earn and are committed to live that way. How did you get out of debt last year? Chances are, you developed a plan, saw it through long enough to get out of that hole, then went back to your old habits. But in order to stay debt free, you need to plan for the long-term and make permanent lifestyle changes. Eliminating debt is only half the battle; you also need to develop sound financial skills to keep you on track down the road.
Plan now for those expenses
So, how do you plan for a future that involves minimum debt? “Debt free” is a misnomer, as few people can afford to pay cash for a home or car these days.
First, develop a long-term financial plan. Do you want to buy a home, or a new car, in the next five years? Are you planning to start a family? Plan now for those expenses, and start putting money away. Instead of waiting until after the purchase to budget for the $500 car payment, start setting it aside now, and use it as a down payment. Remember, less money borrowed means less interest paid.
Budget, be honest about your expenses
Next, develop a realistic budget. Budget is not a bad word. In fact, successful people and corporations live by budgets. To create your personal budget, you must take into account your current expenses, your long-term plan, and the development of an emergency fund. Every budget should also include some “me” money – this is cash you can spend, without strings or thought, on whatever you want. Be honest about your expenses and goals when you develop your budget – this needs to be a plan you can follow for years, not for weeks or months. You need to think of a budget as a life plan to reach your goals, not a restriction on your money. Don’t know where to start? There are many programs and professionals around that can help you develop a sound budget, if you need assistance.
Discipline, follow it through
Finally, you must face the hardest part of staying out of debt – making these plans part of your everyday lifestyle. Most people don’t fail because they have a bad plan; they fail because they lose sight of the plan, and don’t have the passion and discipline to follow it through. Now that your budget and long-term plan are done, stop debating and discussing them – it’s time to follow through, and live by the decisions you made. You may need to be brutally honest with yourself, and take some drastic actions to make this work: If you tend to use your credit card impulsively, then take it out of your wallet and leave it at home. If you enjoy shopping with friends, only go when you have “me” money to spend. Only shop in places that fit into your budget (there’s no point test driving a Jaguar, if you can only afford a Kia) to minimize temptation. Practice saying “no thank you.” Remember, this is your money.
Retrain your thinking and spending
Yes, debt free living is a simple concept, and one not easily executed. Many of us have spent our entire lives learning to live in debt; it will take time, commitment, and skill to retrain our thinking and spending, and get us back to living this way. Living debt free requires change, and change is a process. We will face setbacks, make mistakes, and wonder “Why did I do this?” at some point. But in the end, adjusting our lives in these simple ,yet crucial, ways will provide many benefits.
Some people may be in too far over their heads and would benefit from some simple professional help. Professional help with managing existing debt – with an approach to get out of debt, or maybe debt consolidation of an out-of-control mix of debts.
Similar Articles You Might Enjoy:
Simple tips for Eating In instead of Eating Out
January 7, 2011About a week ago, we posted an article called “3 Simple Ways To Save More Money.” Since then, we have received E-mail and feedback from you, our readers, regarding the 3rd way for saving money, changing your ‘restaurant habit’. Sounds like lots of people are eating out. It’s a tough one to conquer because people today are too busy, there aren’t enough hours in the day, etc..
I thought I would take this opportunity to post a quick follow up giving you some tips that we have had great success with to mostly eliminate the expense of eating out, while cooking and eating at home, and perhaps they can help you as well.
ORGANIZATION
As far as I’m concerned, organization is the key to being able to successfully prepare dinners at home, and in turn save money. I have to tell you that I do spend a little time on Saturday or Sunday preparing for the work week dinner meals, but it’s worth it.
The simple secret and first thing that I do is come up with my ‘weekly menu’. Since at least one evening is a ‘leftovers’ night, I really only have to come up with 4 dinners for the work week.
A typical week night menu might look like this:
One of the benefits of writing out a menu ahead of time is that it will help you with your weekly grocery shopping. You will be less inclined to buy ‘extras’ that you won’t need for the upcoming week. It will also help you to stay on track throughout the week. Notice that all of the meals are relatively quick to make and with a little ‘ahead of time’ prep work, can be made in very little time.
During the growing season in your area, as well as off season, many of the ingredients can come from your own yard, like the ingredients for the garden and taco salads including the tomatoes, peppers, and lettuce ready to mix with the tacos. The green beans we canned last season and the broccoli I will cut fresh from our yard when I get home on Friday. Don’t forget the spaghetti sauce we made from the tomatoes and froze in quart-size Ziploc bags, and the rosemary we dried and crushed a few months ago!
Any work you can do ahead of time will help you. For example, you can cook the ground beef or ground turkey for the taco salad the night before. Any dicing/chopping of vegetables can be done ahead of time. You get the idea.
It’s really a simple thing, that really works.
Organize - Meal Plan – Pre-Prep.
Also, don’t forget to involve family members when possible to help out and turn it into quality time together as a family. Best of luck!
If you enjoyed this, or topics of preparedness, geophysical – current events – risks, consider our survival blog RSS feed, new posts by E-mail, or bookmark us at Modern Survival Blog
Similar Articles You Might Enjoy:
3 Simple Ways To Save More Money
December 29, 2010
Are you like so many others who are overextended financially? Are you barely making ends meet? Or maybe just looking for ways to save more money and trim your personal expenses?
Well just in my day-to-day interactions with various friends and co-workers recently, I immediately discovered 3 ways these people were ‘hemorrhaging’ money. Of course, for me, the solution to saving this money instead of losing it was very simple. The challenge, I think, comes from people actually realizing where they are losing their money and then changing their habits that have been ingrained in their social behavior.
Save Money, Change Coffee Habits
First of all, I saw that a large percentage of them would come into work carrying a cup of coffee that they stopped and purchased at a local coffee shop on their way to work. “Do they own a travel mug?”, I would ask myself. Yes, I too, could’ve been part of the Monday thru Friday, ‘skinny, double shot, no whip, mocha with extra caramel latte’ crowd, but I couldn’t rationalize spending that kind of money in my mind. What’s a few bucks a day for my morning java you might say?
Well, guess what… It’s not a few bucks a day! A few bucks will buy you a nice travel mug which will last you a very long time. Make extra coffee at home and fill your travel mug for pennies before you leave the house. When you consider that the average hyped up cup of coffee, or whatever it is you buy at the posh coffee houses, will run you at least $ 2.00 a cup.
This will save you at least $10 a week, $40 per month and $480 per year. If there are two people in your household getting a coffee every morning, you guessed it, your savings will jump while saving nearly $1,000 per year! $1,000 a year saved by changing your coffee habit! And realistically, in our area, the people I see probably spend more than $2 a day.
Save Money, Change Lunch Habits
The second hemorrhage I noticed was the large percentage of people that do not pack their own lunch and bring it to work. Many will take their lunch break at a restaurant or sandwich shop, or buy take-out food and eat it at their desk.
All right, let’s run the numbers on this. I think it’s fair to say an average workday lunch would run you anywhere from $7 to $12 per day. Let’s take the middle ground and use $9. Yup, if you brown bagged it even just twice a week, you will save money amounting to $18 per week, $72 per month and $864 per year. Pretty amazing when you think about it in those terms.
What if you brown bagged it every day? That’s a savings of $45 per week, $180 per month and $2160 per year. True, it does cost to brown bag your lunch, but in comparison, that cost in drastically reduced.
Packing your own lunch is not only a smart choice but usually a healthier choice! I don’t have time to pack a lunch you might say. I rarely had time to pack one in the morning myself. But I always found 5 minutes the evening before to pack one. Many times simply putting leftovers from dinner into a small container was all it took.
Save Money, Change Restaurant Habits
The last hemorrhage that astonished me was the number of times people either eat out at a restaurant for dinner or stopped on their way home to pick up ‘take-out’ for dinner. Now, believe me, I understand as much as anyone, the pressures and time constraints that working parents are under these days. Between your work day and your commute you could have easily put in a 10 hour day, or more.
Now, don’t get me wrong. I’m not saying there is anything wrong with eating out once in a while, if you are willing to afford it. I’m addressing the ‘chronic’ offenders who eat out or pick up dinner at least once or twice a week (or more).
Who wants to go home and cook, right? We all should! And for several reasons. The first reason is obviously the monetary savings. The money you save will range, depending on your existing habits, but could easily amount to hundreds of dollars per month, for most people. Reduce or eliminate stopping at a fast food restaurant for say $20 (depending on your family size, of course) or dining out for say $50 or more.
Exhausted from a long day, why not make dinner a family endeavor. Your homemade dinners can be healthier as well as a means for bringing the ever dispersing family together. Get your spouse and children involved. Use this time to also discuss your individual days and how they went. Better yet, designate the dinner prep time, dinner time and dinner clean up time as a “No electronics time zone”. Off limits are the iPods, iPhones, Blackberries (‘crack’berries as I like to call them), game consoles, computers, and TV’s.
Bring back the days of talking, sharing, and spending a little time together as a family, even if it is for only an hour in the evening. This is one of the foundations of the family, communication, a traditional value we are sorely lacking these days. And the meals do not have to be extravagant. They can be quick and still be tasty and healthy!
Summary
These three simple steps have the potential to save you thousands of dollars (or whatever your currency) each year! We are all habitual people. We do things by habit. By simply examining our habits with an open mind, will often reveal alternatives, many of them less expensive.
If you enjoyed this, or topics of current events risk awareness or survival preparedness,
check out our current homepage articles…
Similar Articles You Might Enjoy:
My First Thrift Town Experience
December 28, 2010Permalink
My following experience is a perfect fit for the recession-proof-household category, and anyone looking for bargains.
I have been living in the same area for a little more than a decade and have probably driven past a particular medium size building storefront on the main drag about 5,000 times, and had never stopped in to check it out. Until the other day.
This store is called “Thrift Town“. My wife had stopped by there many times and had been trying to get me to check it out, while my neighbor visits the store regularly and is always returning home with amazing bargains. The store itself is mostly filled with racks and racks of clothing, men – women – kids – all sizes – all types. There are also a fair number of miscellaneous items that are not clothes.
I finally gave in the other day, and checked it out. You see, all along I had this idea in my head that the clothes at these type of bargain stores, being “used”, were for other people, not me. I’m not sure why I had this mental block, especially being one myself to look for bargains. For some reason, the thought of wearing another persons clothes, didn’t sit right with me – as if the clothes would be dirty or have “germs” on it or something. I was wrong.
When I started browsing through the mens racks, I couldn’t believe my eyes. Most of the clothes were in excellent condition, many of them hardly showing any signs of wear, while a surprising number of them were brand name labels. They were perfectly clean, and if I didn’t know any better, many of them could have been on racks in “real” clothing stores.
Now here is the best part. Talk about a bargain… every single mens shirt in the place had a price tag of either $1.99 or $2.99! What? Really?
The pants, the shorts, the sweaters, almost everything was priced the same, pretty much the most you would pay is $2.99!
After sifting through the enormous quantities of clothes, all very well organized by sizes, I walked out with a handful of shirts and shorts that cost me about $25. One of the shirts was even a Nordstrom polo shirt, in near perfect condition. These same clothes were probably worth at one time (not too long ago), about $150 or more.
The store appears to have a great business model, was very busy, and they appear to have about 15 locations in 4 western states. I have no idea if the other stores operate similarly (I assume that they do), and this isn’t an endorsement of the company itself.
However, it made me think about how there are probably other similar stores in the country, just waiting for you to stop by and pick up some deep bargains.
Even though most of us can afford to buy new clothes at the big name stores, you might be surprised at what you might find at a bargain outlet like this one, especially when looking for casual wear.
Why not look for a store like this in your area, and Save Some Cash by buying “almost new”?
If you enjoyed this, or topics of preparedness, geophysical – current events – risks, consider our survival blog RSS feed, new posts by E-mail, or bookmark us at Modern Survival Blog
Similar Articles You Might Enjoy:
