How often do you hear people talk about how they would live their dreams if they only had a bit more money? People always dream about moving to a remote area or about staying home with the kids or about relocating to the bug-out location, but often feel that these things are financially unreachable. Do you do this yourself?
If so, then maybe it’s time to take a good hard look at your finances and enact a personal austerity plan to radically cut expenses. Most people would be surprised at the changes that can be made when they rethink the definition of the word “necessities”.
aus·tere[aw-steer]adjective1.severe in manner or appearance; uncompromising; strict; forbidding.2.rigorously self-disciplined and severely moral; ascetic; abstinent3.grave; sober; solemn; serious.4.without excess, luxury, or ease; limited; severe.5.severely simple; without ornament ; lacking softness; hard
With the gloomy economic forecast, it’s not reasonable or rational to expect things to improve in the near future. If you want to be somewhat immune to the financial difficulties coming down the pipe, you need to perform a financial makeover to pare down the monthly output to the bare minimum.
Does this sound kind of grim? It’s not – decreasing your monthly output provides a different kind of safety net. You can end (or at least reduce) your slavery to the system, where the government helps itself to at least 30% of your paycheck through payroll deductions. With your newfound freedom, you may discover that you have the money to start a business, relocate, or cut back your work hours to spend more time doing the important things in life.
Devastating financial changes are coming to a location near you. Wouldn’t you prefer to make the cuts now and adjust accordingly, instead of having them forced upon you through evictions, foreclosures, repossessions, and other painful methods?
If your finances are out of control, the best possible reality check is a stark look at what necessities really are. It is not necessary to life to have an iPhone, a vehicle in both stalls of your two-car garage, or for your children to all have separate bedrooms. People in Southern and Eastern Europe right now will tell you, as they scramble for food, basic over the counter medications like aspirin, and shelter, that “necessities” are those things essential to life:
Absolutely everything above those basic necessities is a luxury.
So, by this definition, what luxuries do you have?
Some are more important than others, based on your lifestyle and might be considered secondary necessities. You might require transportation, work clothing, a computer and an internet connection, electrical appliances, a cell phone – you are the only person who can define which are these are luxuries and which are secondary necessities. It’s essential to be truly honest with yourself and separate “wants” and “I really enjoy having this” and “the kids will complain without it” from “needs”
For example, I am a freelance writer who lives in a remote area. Without an internet connection and a laptop, I have no work. For me to make a living, therefore, my computer and monthly internet bill are a necessity. However, because I work from home, a fashionable work wardrobe is not important to me. I can wear jeans and a t-shirt to work every single day, and it won’t affect my career at all. If you have to go out to a job in customer service, for example, then perhaps a computer and internet connection would be less important than a good-looking career wardrobe.
A couple of years ago, I began to see the writing on the wall for my own personal finances. I’m a single mom and my former husband is deceased, so there is no child support coming in. So as far as raising these children goes, I’m the only game in town. I realized that the industry I had been working in for many years was very shaky (automotive) and that I’d better get my financial house in order.
I began to cut expenses as quickly as possible. I was making a very good income and our lifestyle had “improved” with each pay raise and promotion. Although these changes were not incredibly popular with the kiddos, I made them ruthlessly. I made the following adjustments:
These efforts paid off within a few months, because my prediction was right – I got downsized. Had my expenses been at their former level, we would have struggled to keep the electricity on and food in the cupboards.
When I lost my job, I began looking for ways to make money from home. I was fortunate and picked up some freelance jobs pretty shortly, but I realized that I couldn’t make ends meet with what I was making, at least not in my then-current location.
So, I began a search for a less expensive place to live. The beauty of what I do for a living is that I can live anywhere – I only require a reliable connection to the internet. Within a few months, we’d located a very distant, very remote little cabin in the North Woods. We sold a bunch of stuff and then packed up the rest and moved 7 hours north to the boondocks, a move that saved over $1100 per month when compared to city life.
I realize that the changes I made are not changes that will work for everybody. I’m not suggesting the changes are a whole lot of fun either. Adjusting your own situation requires a brutal analysis of your expenditures. If you can’t get your partner or spouse on board, it’s all but impossible to do a complete overhaul. Kids, however, have to deal with it – expect loud complaints but be firm.
Print off your bank account statements for the past 2 months. On a piece of paper, track where your money is going. List the following
Don’t say to yourself, “Well, I usually don’t spend $400 on clothing so that isn’t realistic.” If you spent it, then it’s realistic. You are averaging together two months, which should account for those less common expenses. Brutal honesty isn’t fun, but it’s vital for this exercise.
So….what do you see when you look at your piece of paper with your average monthly expenditures for the past two months? Are there any surprises? Did you actually realize how much you’ve been spending?
It can’t continue like this. The economy will not withstand it. Step one is to see where you can cut things out right now from the above expenditures. Can you reduce your grocery bill? Slash meals out? Budget more carefully for gift-giving and school clothes?
Step two – this is where the brutal cuts come in. What can you change about your life? Where can you reduce expenditures by several hundred dollars monthly? This is the point at which most people say, “I can’t.” Most people don’t want to move to a smaller house, get an old car, or go without premium cable. But this is where you can truly dig in and change your life.
As I said before, everyone’s situation is different. You may be locked into a mortgage on a huge house in a market that won’t even cover the balance of what you owe. It could be the same with your vehicle. Explore all of your options, though, because paying a few thousand dollars to get out from under it could be worthwhile. Some people could have reached the point where they must begin to default on payments. That too, is a personal choice. I’m not recommending that you blow off your obligations. (However, do consider the fact that large banks get bailed out by the government, and everyday people do not.) Before making decisions like that, be sure to discover all of the potential ramifications, such as repossessions, garnishing of bank accounts, and ruined credit.
Here are some cuts to consider:
This is not a comprehensive list – when you look at your personal expenditures, other ideas will present themselves.
Why is it so important to make these changes?
Because if you don’t change your way of life, the government will. A job loss will. Inflation will.
These upcoming cuts won’t hurt the ones who are making the cuts. Congress members will still get large salaries and raises. The First Lady will still spend millions of taxpayer dollars on vacations that would make Marie Antoinette blush. The White House will still serve gourmet meals while Americans are digging through the garbage to stave off hunger.
Realistically speaking, the way things are going, none of us is likely to get a hefty raise. We’ll be lucky to keep the incomes we have. But expenses are only going to go up. To keep the true necessities within reach, we need to reduce our expenditures and put away emergency funds and stockpiles.
Personal bank accounts are being plundered across Europe. People are not just living paycheck to paycheck – there ARE no more paychecks. They’re living hand to mouth, hunting and gathering what they can in order to stay fed.
Making some difficult changes now can provide a stable standard of living in a world that is going downhill at breakneck speed. By decreasing your monthly output, you can hang on to necessities. I’d rather choose my own austerity plan than to have it forced upon me.
The bells are tolling on the American economy. Every day, another expert is warning us of the imminent demise of our way of life. If you’re paying attention, you can see it coming, like some huge storm system, bearing down on you. You don’t stand there and wait for it to hit you. You don’t have to be a passive victim of the economy. It’s time to sit down and take a long hard look at where your money is going. Lots of financial experts give tips about reducing your discretionary spending but what about those fixed expenses? You can free up some large sums of money by reducing your monthly output.
Most of us have a set of fixed expenses. Some of these are vital, some are not, and what is vital for me might not be important for you.
What fixed payments come out of your bank account every month?
Some of these, you can’t do anything about. However, some of these payments can be reduced or gotten rid of altogether.
The real question is, if your financial circumstances changed dramatically, could you afford your current lifestyle? If the answer to that question is “No” then you need to figure out how to reduce your regular monthly output.
Keep in mind that what works for my family may not work for your family. It will depend whether your spouse is on board, how dire your situation is, and with how much importance you weigh your frugality makeover what you opt to change. Some of these measures would be drastic, and others would only cause a minor change in your lifestyle. Let’s take a look at each of these expenses individually and ask some important questions.
It’s far better to make these changes before you’re forced to do so by circumstances. If you can reduce your fixed monthly expenditures, you’re less likely to default on things that are true necessities, like keeping a roof over your head and food in the cupboards. I would prefer to control the cuts myself rather than have the decisions made for me by foreclosures or repossessions.
Despite what the government wants us to believe, the financial situation in this country is not getting better, and it isn’t going to improve for a very long time. The economic storm is bearing down on us, and the most important preparation you can make right now is to figure out how to weather it.
Lots of experts will give you excellent advice on how to create a budget. Creating a budget is actually pretty easy. You figure out what your expenses are, take this from your income, and then figure out what to do with the money you have left over.
Sticking to the budget…that’s the tough part.
This is where most people experience financial failure. They know what they should be doing, but that little treat is just calling out to them, and they think, “One off-plan expense won’t matter.” Or perhaps they have a spouse who is not really on board with the whole budget business and they are constantly playing catch-up because of unplanned expenses. The economy is certainly not getting any better, so it’s important to get control of your finances NOW.
With careful planning, you can keep everyone happy, have the occasional treat, and still stick to your budget.
Really, if you think about it, a budget is a lot like a diet. Everyone hates doing it, but sometimes our pants won’t zip and we’ve got to do something about it.
So, you figure out what your caloric intake should be. Every bite of food you eat should be measured and accounted for and you subtract the amounts from your allotted intake.
Sometimes you have an off-plan meal – a piece of cake at a birthday party, a celebratory dinner out, or an ice cream cone with the kiddos. You have to account for this too, and you can’t do it too often, or your diet will fail.
Sometimes you have loved ones who sabotage your good intentions, either deliberately or thoughtlessly. They might be food pushers (come on, one bite won’t kill you), guilters (but I made this especially for you), or influencers (just because I buy chips doesn’t mean you have to eat them.) Whatever the case, the result can be the same – your careful plan is in shambles.
It’s exactly the same with money.
It is often the influence of others, no matter how well-meaning, that causes you to go over you financial “calorie limit”. If you plan carefully, you can allow yourself some wiggle room to enjoy something outside of your normal diet (or budget). For example, when dieting, if you know that you have a party to attend, you might eat fewer calories for a day or so leading up to the event so that you can splurge without guilt. When budgeting, if you know there is an outing planned, you might cut back a bit on the grocery bill that week in order to have extra money to spend during your event.
When dieting, if you want a treat, you can have it – but you might be eating steamed veggies for the rest of the day if that treat is the equivalent of your daily caloric intake. Likewise with spending, if you want a Disney vacation, you can have it, but you might need to live in your uncle’s car, since you won’t also be able to afford to pay for that, your mortgage, and your car payment. Eating whatever you want can have unpleasant consequences. So can spending whatever you want.
Most folks have created a budget before, so feel free to skip over this part.
Creating a budget is simple. In one column, you have your money in, and in another column, you have your money out.
Money in might be:
Money out might be:
So your first step is figuring out those two totals. In most cases, your money in will be more than your money out. If it isn’t, you have a serious problem and you need to look at lowering your fixed expenses ASAP, or your financial problems will spiral so far out of control you’ll end up destitute.
Assuming you have some money left over, this is for your variable expenses. You may want to allot this money to savings, to preps, to paying off debt, or to spending money for the members of your family.
Are you surprised when you see the numbers there in black and white? Maybe you bring in more than you thought. Maybe you are spending more than you realized. Either way, now that you can look at it all on paper, the next part will be a lot easier.
If you are going to keep spending money using credit cards, then you might as well skip the rest of this article. You’ll be paying exorbitant interest if you don’t pay them off in full each month, and what’s more, it’s impossible to control spending when people can just swipe a card. This is especially true if other family members who are not as budget conscious have access to the cards.
Lock them up in your safe and use them only when it is necessary. Then immediately pay the balance off in full.
So, planning the budget is easy. Anyone who can do basic math can create a budget. But how do you stick to it and get your finances under control?
Control…that’s the key word.
This is the method that I use. Feel free to adapt it to your situation.
I have a bank account that I use specifically for fixed expenses. All of my payments out go through that account. Everything that is not earmarked for bills comes out of the account. I don’t carry a debit card with me for this account, to reduce the temptation of knowing I have that money there…maybe I could just buy this and replace the money real quick before the bills come out.
The money that comes out is immediately organized into…Altoid tins. (Finally another use for those little tins!) The tins go into the safe until they are needed. It’s like the envelope method, but in a different container.
If there is money left over after I’ve sorted my variable expenses into the Altoid tins, this goes into my wallet and is my spending money. I keep grocery money in (you guessed it) an Altoid tin in my purse.
When spending grocery money, the change and the receipt go into my tin. That way, I know I’m sticking to my budget for food. When the tin is empty, it means I’m out of grocery money. Sometimes I have extra money left at the end of the week, and that stays in the grocery money tin to allow me to make some large bulk purchases.
Some of the variable expenses that I delegate money to are:
It’s important to prioritize these areas. Just because the tin exists, doesn’t mean that you have to put money into it each month. I’ve listed these in the order of importance in our family.
Just because there is money in the tin doesn’t mean it gets spent each month. The beauty of this is that you less frequently have a big expense that you haven’t planned for. If my daughter needs new glasses, the money is there, available for the appointment. If we want to go visit a museum or national park, we have some money set aside to do that.
Alternatively, if the tin is empty, the expense has to wait. Maybe the birthday celebration will be a bit more humble, the greenhouse will have to wait to be purchased for a few more months, or we’ll have to make do with clothing that is a little snug for a couple more weeks. Our entertainment will be limited to Netflix, a nature walk, or a trip to the library.
Like I said, the key to this is control. One person has to be in control of the finances. I’m not recommending that anybody become a tyrant, doling out nickels after a family member begs and pleads. However, if anyone can just go and help themselves to the money that has been budgeted, this is not going to work. Unless both partners are completely on the same page, the person with the best financial sense needs to hold the key to the safe. I know that if you’ve just been shaking your head, paying off the credit card bill, and belly-aching a little each month, that your family isn’t going to like this. You’ll probably have to listen to some adamant complaints. It will be worth it in the end when you have the peace of mind that comes with having your budget under control.
Most people hear the word budget and automatically cringe, picturing a state of horrible deprivation, old clothes, and perhaps their big toes poking through that hole in their sneakers. Much like the word “diet” (see above) “budget” is thought of in negative terms.
I’m not going to lie…sometimes it’s like that, especially if things are really out of control.
But usually, at least after the first couple of months, it isn’t bad at all. Being on a budget doesn’t mean that you can’t spend money. It means that you plan for your expenditures so that you can afford the stuff of everyday life. It means that you pay for the necessities first and that you get the extras second. It means that you scrutinize where your money is going and you make certain that your purchases are worthwhile – do you really want that fancy meal out each week, or would you rather put that money towards a fun family outing at the end of the month? It means that those expenses that you know will come up (like new eyeglasses) will be planned for, and they won’t make an enormous dent when it’s time to pay for them, leaving you rolling pennies for gasoline to get to work.
The peace of mind that comes from having control of your money is priceless.
When you first start prepping you want everything RIGHT NOW. You look around your home and see nothing but shortcomings. You don’t have enough food, you don’t have a woodstove, you have no secondary water source…that’s it. You and your family are doomed.
You feel a panicked urgency because you’ve learned just enough to know that you are NOT prepared.You know that there are all sorts of supplies that you need, but if you’re like most of us, you’re on a budget. Very few of us can afford to buy everything we need all at once.
Stop panicking. Take a deep breath. You can devote yourself to getting prepared without breaking the bank.
So if you have to split up your purchases, how do you prioritize your supplies? How can you create a sensible supply quickly before an impending crisis occurs?
The recommendations in this guide for new preppers will help speed you through the preparedness process. Wherever possible, use items that you already have. Consider this a checklist of what you need and fulfill it as you can. In each category there will be a range of options, including some freebies whenever possible, as well as reading material on the subject.
Please keep in mind, the following doesn’t provide you with a year’s supply of anything. It will get you through most short-term disasters with aplomb, though. Once you have this foundation in place, you can spend time and money building upon it.
Water is near and dear to my heart, so much so that I wrote a book on the topic. I always put water at the top of the list, because without it, you’ll be dead in 3 short days. The need for an emergency water supply isn’t always the result of a down grid disaster. Recently, we tapped into our emergency water when the well pump broke. Some places have had water emergencies when the municipal supply was contaminated by stuff like industrial spills or agricultural run-off. Floods and bad storms can also sometimes cause the water supply to be tainted.
Use containers you have RIGHT NOW and fill them with water from the tap. Put the lid on and stash them away. Don’t use milk jugs or juice jugs for drinking water, but you can use them for sanitation water in a pinch. If you can get your hands on some empty, clean 2-liter soda bottles, that will be perfect. We don’t drink soda, so we have some of the 1-gallon water bottles from the store.
Buy some filled 5-gallon jugs of purified water. How much you need should be based on the number of family members. The rule of thumb is 1 gallon per person, per day, but you may find you need a lot more than that when you add in pets and sanitation needs. You may be able to find these less expensively, already filled at the store. When I lived in Canada you could pick up a filled jug for less than $10, but California has all sorts of environmental rules that make these containers more expensive here. Another option is the 7-gallon Aquatainer that is designed for easy stacking. (Be sure to put this in a place where the floor can support the weight of a bunch of heavy water containers.)
Have a way to dispense the water from the jugs. We have a top-loading water dispenser for use in emergencies. These MUST be top loading because the bottom-loading ones require electricity to run the pump.) If you don’t want to make that kind of investment, you can get a nifty little pump for about $12.
Get a gravity-fed water filter. I use a Propur, but it’s a hefty investment when you’re trying to get everything at once. If you can’t swing that, buy Jim Cobb’s Prepper’s Survival Hacks book. It has numerous DIY water filters that you can make without spending a fortune.
If the power goes out, how will you cook? You need the ability to boil water, at the very least. If you can boil water, then you can heat up canned food or prepare freeze-dried food in an emergency. Here are some secondary cooking methods, some of which you may already have.
Wood stove or fireplace. If you heat with wood, you’re a step ahead already, at least in the midst of a winter power outage. However, you won’t want to fire up the wood stove to cook in the summer, particularly since you may already be battling the heat without a fan or air conditioner.
Gas kitchen stove. Some kitchen stoves that use gas or propane can be used without electricity while others can’t. (If you’re replacing your stove, this is definitely a quality you’ll want to look for.)
Outdoor barbecue. If weather allows, you can fire up your propane or charcoal barbecue during a power outage and cook your feast outdoors.
Rocket stove. There are all sorts of little emergency stoves out there which are designed to boil water quickly and without the use of a great deal of fuel. My favorites are the Volcano 3-way stove and the Kelly Kettle. You can also make an efficient stove. We made one last week that brought water to boil in less than 4 minutes.
Do not risk using emergency stoves designed for camping, indoors, unless the manufacturer specifically says that it can be used indoors. To do so is to risk fire, smoke damage, or carbon monoxide poisoning.
Emergency food comes in many different forms. The first thing you have to look at is cooking methods, which we discussed above. The food you choose needs to be able to be prepared using the method you have available now, not the one you plan to get in the future.
Another important note is that your emergency food supply should be nutritious. You won’t want to fill up on empty calories when you may be making greater demands of your body. Keep in mind food restrictions, too, because an emergency situation is bad enough without an allergic reaction or intolerance illness.
There are several different ways to create a food supply.
See what you have. Go through your kitchen cupboards and see what you already have that could be used in an emergency. Things like nut butters, crackers, and other no-cook snacks are great options. Canned foods that only require heating are good as well. Instant rice or noodles can be added to your emergency supply. Group these items together on a special shelf or in a Rubbermaid container so that they are available when you need them. Figure out how long your supply would last your family before you go and purchase more. Figure out what shelf-stable items you need to add to balance out your supply. (Perhaps dried or canned fruit and vegetables, canned meat, jerky, etc., would provide more nutrients and variety.)
Emergency buckets. The very fastest way to create an instant food supply is emergency buckets of freeze-dried food, which require only the ability to boil water to prepare. One caveat: do not go with the cheapest thing you can find. Some of those taste absolutely terrible. As well, they’re loaded with unhealthy chemicals and sodium. If you normally eat very healthfully, then move to MSG-laden freeze-dried meals, you’re not going to feel well at all in an emergency.
My very favorite brand of emergency food is Numanna, found HERE. It’s surprisingly tasty, contains no GMOs, no MSG, and no Aspartame. They even have gluten-free products, which is important to my family since we have some pretty severe intolerances. These are already prepacked to last for 25 years and are a crucial part of my long-term food supply.
Build a pantry. Make a list of what you need to feed your family for a month without a trip to the store, and without reliance on long cooking times. (This rules out beans and rice for most people.)
If you live in a cold climate, winter weather during a power outage can be a life-threatening emergency. It’s vital to have the ability to stay warm if the power goes out. Most central heating systems require electricity to run the fan or motors. Here are some options for secondary heat sources if you generally rely on your central heating system.
If you have no additional heat at all, you can usually keep one room tolerable for 2-3 days. If the cold is relentless and the outage lasts longer than that, you may need to seek other shelter. Watch your temperatures. If the daytime temperature in the house dips below 40 degrees, the night time temperature will be even colder, and it won’t be safe to stay there, especially if you have children or family members who are more susceptible to illness.
These methods can help you stay cozier during a storm.
Another thing that can quickly become dire is personal sanitation. Depending on your situation, you may not have running water or flushing toilets. You need to stock up on supplies to make the best of these situations and keep family members healthy.
Here are the items I recommend that you keep on hand for water emergencies:
Lighting is absolutely vital, especially if there are children in the house. Nothing is more frightening than being completely in the dark during a stressful situation. Fortunately, it’s one of the easiest things to plan for, as well as one of the least expensive.
Some lighting solutions are:
Some basic items will make your life much easier during an emergency. Here are some things that are essential in the event of a power outage:
As you progress, you’ll want to expand on the basic tools.
It’s important to have a basic first aid kit on hand at all times, but particularly in the event of an emergency. Your kit should include basic wound care items like bandages, antibiotic ointments, and sprays. As well, if you use them, keep on hand a supply of basic over-the-counter medications, like pain relief capsules, cold medicine, cough syrup, anti-nausea pills, and allergy medication. Particularly important if sanitation is a problem are anti-diarrheal medications. Be sure to have a couple of good medical guides on hand.
This is something that will be unique to every family. Consider the things that are needed on a daily basis in your household. It might be prescription medications, diapers, or special foods. If you have pets, you’ll need supplies for them too. The best way to figure out what you need is to jot things down as you use them over the course of a week or so.
As you continue along your preparedness journey, you’ll find that there are other items that are very important to you. For example, you’ll want to build yourself a bug-out bag for possible evacuations.
And don’t be surprised when this mindset creates within you the itch to be more self-reliant, which means you’ll be adding gardening tools, sewing supplies, woodworking tools, and other supplies to your stockpile.
Another aspect of preparedness that is often overlooked in the beginning of the journey is the ability to protect your home and family. If you aren’t already of this mindset, the idea of bringing home a firearm can be overwhelming. When you’re ready to learn more about personal protection and home defense, go HERE and read this article.
You’re going to do some list-writing, so grab a notebook and pen.
Don’t panic. Start with your basics in each category and add to it as your time and budget allow.