Financial preparedness is one of the areas of prepping that’s typically stressed the least. Yet, it’s incredibly relevant and critically important. There are four key areas to consider in your plans.
Debt Reduction
Every dollar you spend in interest is one less dollar you have to put toward something useful or fun. While it can be difficult to achieve and maintain a debt-free status, at the least, do what you can to reduce or eliminate high-interest credit cards and similar types of debt. This won’t happen without a plan, especially if you’re currently drowning in debt.
One approach is to make a list of all of your debts. Pick the one with the lowest balance and pay everything you can afford on that bill while still paying the minimum on everything else. Do this each month until the debt is paid in full. Then, move on to the next lowest on the list and do the same thing. Lather, rinse, repeat until you’re above water again. My parents did this back in the mid-1980s, and it still works today.
Emergency Savings
For far too many people, an unexpected expense of even a few hundred dollars will send their entire household budget into a tailspin. It’s important to establish some sort of emergency fund for things like car repairs or replacing major appliances that kick the bucket.
It’s difficult to do, especially when you’re trying to climb out of the financial hole. But look at it like food storage. You can’t do it all at once, but you can work the problem a little at a time. Each paycheck, toss just a little bit into your emergency fund. Even if it’s just five bucks a check, that’s better than nothing.
If you come into extra money, like, let’s say you have a rummage sale, put half of the profits into your savings. Spend the other half on something fun. It’ll all add up over time. The key, though, is to never touch the emergency fund unless it’s an actual emergency. Make every effort to avoid spending it unless you have no other option. Don’t overlook this important area of financial preparedness.
Retirement Planning
A lot of preppers seem to be relying on the world coming to an end before they hit retirement age. While I suppose that’s always a risk, it might be best to hedge that bet. A retirement planner can help you put together a plan that makes sense for your individual situation.
That said, this is an area where a multi-pronged approach is best. If your employer offers a 401(k) plan, especially if they do any sort of matching, that’s a great place to start. Look into Individual Retirement Accounts (IRAs) as well.
Various types of investments might be beneficial, including stocks as well as real estate. Some of these options may not have as high of an upfront cost as you might think. The earlier in life you start planning for retirement, the better off you’ll be in the long run.
The Death File
We’ve talked about this one a little bit before in our review of the Nokbox. The basic idea is to assemble everything your family will need after you pass. This goes beyond just your Last Will and Testament and includes everything from financial information to a list of people to notify of your death.
This is something few people truly want to do but look at it as the last gift you can give to your loved ones. Take it from someone who knows, they’ll appreciate it.
Financial preparedness isn’t as sexy as practicing with firearms or collecting gear. But it also doesn’t require a world-altering calamity to occur before you’ll make use of it.
