Chapter Three: Money Management Is the Key to Good Prepping
Managing your money and getting your finances in order is one of the core aspects of being a good prepper. It doesn't matter if you have a lot of money or barely anything. Even an average person can improve their financial habits to create a solid foundation for their everyday lives and an emergency.
You don't want to be someone who has a large stockpile of items but barely has any money to their name, along with high debt and nothing put aside for retirement or emergencies.
If you want to be a good prepper, you need to start thinking about lowering your chances of a terrible event occurring and being prepared for it. Being a reasonable and sensible prepper requires you to be prepared for the situations you are most at risk of experiencing.
It can be kind of fun to imagine what would happen should there be a zombie outbreak, and the only way to survive is by staying inside the home, but let's face it, it's not likely to happen.
You're much more likely to experience another global pandemic, a disruption to the food supply, or hardships to your own finances.
It is this last factor that most preppers start prepping.
In America, 51 million households struggle to keep a roof over their heads and put food on the table. 20% of American children go hungry every year. 14% of Americans live below the poverty line. 57% of Americans do not have $1,000 in savings. Every year, 25% of American experience extremely financial hardships. Around 46% of Americans cannot afford to pay $400 in car repairs without relying on a credit card. 26% of Americans have nothing in their emergency savings account.
Average Americans have a debt of $125,000, and those with debts of $16,000 pay 17% in interest payments. The average student loan debt for graduates in 2016 was $37,000. More than 25 million Americans cannot afford medical help or purchase medicine such as insulin. Soaring medical costs have left 620,000 Americans declaring bankruptcy.
More than 50% of Americans have no savings for retirement, and less than 20% say they have saved enough for that time. Millennials have savings 30% smaller than any other generation. More than 80% of the gains are received by the top one percent of the wealthiest population. Most average people haven't had any improvements to the economy in years.
Data and statistics don’t show things improving in the future. In fact, it shows that things will only get worse for those who are not in the top five percent. Changes to the demographics and the job losses combined with automated and machine dependency will only worsen the situation.
Problems with finances can have a severe and devastating impact on your life. Your children face more disadvantages, your performance at work decreases, divorces, depression, stress, mental health issues, bankruptcy, living paycheck to paycheck, getting further and further into debt – the list goes on and on, and it's not a good experience for anyone.
For those looking to prep, you are less likely to be successful if you suffer from financial problems due to fewer resources and options. For example, you've got to go to the doctor to treat your back pain, but your car breaks down and needs significant repairs. You pay for the car repairs so you can continue to get to work, but now your back is so painful without treatment that you are forced to stay off work. You get fired, and then all the bills start piling up, and you are in considerable debt.
It's perfectly acceptable to start prepping even if your finances are not as strong as others. You may start working on the fundamentals of your prepping checklist while trying to lower your debt and create savings for emergencies. Remember to be practical and, if need be, seek advice from a professional.
Creating an Emergency Fund
There are several reasons why it is important to have an emergency fund set aside to last you for three to six months. These include such situations:
- To bail out a family member
- Stockpiling necessary items before a storm
- Dealing with an unexpected funeral
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