Total Survivalist Blog: economic collapse

Bayou Reconnaissance Man

wrote an interesting post

How To Prepare Under These Conditions.

The basic highlights of the question:

I’m stuck with an
unemployed partner and teenage kids who can’t earn their own living. 
We haven’t been able to afford reserve supplies for an emergency, yet
it’s clear that even harder times are on the way.  I want to build up
reserves for my family to help cope with them, so I’m selling a bunch of
our stuff at garage sales and through Craigslist.  By mid-November I
hope to have $2,000 to spend.  What’s the best way for me to use that
money?

(Peter’s notes) A bit of background:  she lives with her husband and two kids, a boy of
15 and a girl of 17, in a small suburban home in a Missouri city.  The
local crime situation wasn’t bad until recently, but it’s getting worse
as economic hard times bite deeper.  The family owns one older car free
and clear – they sold a second, newer vehicle when they couldn’t afford
the monthly payments.  The mortgage on their home runs about $650 per
month, which isn’t too bad if both of them are earning, but for the past
year her husband hasn’t been able to find work.  Her income isn’t
enough to cover all the bills.

Peter added his thoughts in a subsequent pos

t. It is worth reading both of these posts before continuing.

Ryan here: 

We need to look at the issue of the family income and housing situation separately from the question of how they could potentially prepare.

Due to a limited amount of information I have to make some assumptions which will be based on general trends and may or may not be accurate for this particular person.

One particular assumption based on the tone of the whole conversation is that we are talking about a fairly small ($$$) wise gap between their current situation and making it. This assumption is largely because folks tend to buy homes slightly proportionately and we aren’t talking about a $2,500 mortgage here, we are talking $650. Of course any income gap over basic expenses is an issue but this problem is more manageable than a much larger one.

The income/ budget/ housing situation can be broken into 4 main areas: income, income stimulus via selling stuff, overall budget and housing.

Income: First and foremost this family has an income problem. Dude (dad or male partner/ whatever) needs a job time now. Unless there is some information I’m not tracking, like he is paralyzed, has terminal cancer, etc, Dude needs to be a man and start providing for his family right blankety blanking now. End of story.

Since he has been unemployed for a year I assume things are not going well finding a job in his previous field in their area. Maybe Dude needs to seek lower prestige/ compensation work in his chosen field. A legitimate mechanic becoming the oil change guy at Quicky Lube or a journeyman carpenter fixing decks and building sheds won’t feel great or pay as well but we aren’t trying to get rich, we are trying to keep a roof over the families heads and food on the table. The advantage of this COA is that if he gets a foot in the door and proves to be a decent worker when a better job (that he is qualified for) opens up he should be a lock. A potential additional option for Dude exists if his skill sets lend themselves to odd job type work and he has the gear to do it on his own.

 Another option is to get a very low skill anyone can do it type job. Dude could be a temp worker at UPS and sort packages, mow lawns, dig ditches, sweep whatever. This is not the forever plan. The goal is to keep things going till he can get back into a better job.

Honestly Dude needs to get the first job he can find. I really don’t care if it is swing shift mop boy at Show World. He needs a check time now. I’m not 100% sure he is in a funk but it would fit with the long term unemployment. Once he gets back to doing something, anything, hopefully he can get back into something better.

One could say you can put effort into job searching and be picky in relation to your options. If the family was making it on Momma’s income then he has time to be picky and look for a job at his leisure. If they had a 50k safety net that would replace his income for a year I’d say he can be picky and have some lazy mornings or whatever. In this families situation I would say job searching is his job right now so he should do it from 8-4 every day. Given the inability to wait he has to take any job he can do.

Ditto for Dude potentially going to a different location from the family for awhile. Maybe dude needs to work someplace else for awhile to make the family budget work. Depending on his skill set(s) some parts of the country, specifically south Texas, the Gulf Coast and North Dakota are booming. Many of these jobs have employees work long days for a stretch then have more time off. Several weeks on and a couple off is not uncommon. This would work well for him to be able to stay busy (and not bored/ lonely) wherever employment is then spend some time at home.

Again I do not know the whole scenario and maybe there is a valid reason for this long term unemployment and not getting any sort of job but were I the spouse (of either gender) when the family is in this situation a serious conversation would have happened awhile back. This person needs a self esteem boost and a loving but firm push out of apathy in the right direction.

As to the kids. Personally as a father (of little ones) I am disinclined to tell school aged teens they have to get jobs to help the rents fill an income gap, doubly so when a parent is not working. However letting them know that we will meet their needs for shelter, clothing and good it might not be exactly as well as we (and they) would like.

(Slipping into the budget part because it makes sense to finish this small part here. I wouldn’t ask them to put their part time earnings toward my mortgage problem. However they would be nicely informed, in as soon as possible, that their basic needs would still be met by us but any desire for fashionable clothes, cell phones, spare cash to go to the malt shop, etc all were regrettably going to be unfunded by the family budget. If they want these things in the near future they would need to earn the money to pay for them.)

Income stimulus via selling stuff:

In his response Peter hit on this a fair amount

. Admittedly part of the original question mentioned her selling some stuff to free up cash for preps so that is a big factor I imagine.

I do not find selling stuff to help with the economic situation to be a meaningful option unless they have some big ticket items like a 10k Harley in the garage, gun/ stamp/ coin collection sitting around it’s not going to do much to close this gap.

As to selling stuff for preps. Selling unused items to buy preps is a fine idea.

Overall Budget: This has  probably been done already but it is worth relooking the budget. Things that used to fit might need to be cut out for awhile. The short term prioritization of food, energy, mortgage, insurance, bills is probably a good way to look at it.

Wifey brought up an excellent point. Since Dude isn’t working he could look at it as his job to save as much money as possible. Cutting coupons, making bread from scratch, making lunches for people to take to work/ school instead of eating there, etc.

Housing: Peters comment about relocation are valid. If they want to stay in the area and want to try and make it work that is one thing but it doesn’t seem like they really do. Additionally the potential implications of being come after for the balance of the loan are worth looking at though if the family is in effect judgement proof (no significant assets, big retirement accounts, etc) it is less of a concern than if they had 100k in an IRA and another property.

The amount of equity in the home is a big consideration here. If they have 50k in equity in the house  I’d say fight like hell to hold onto it at least long enough to sell and get that money out. On the other hand if they are underwater or have a few grand in equity that would be eaten by various home selling costs it’s probably not worth the emotional struggle to prolong the matter.

The cost of other housing in the area (if they choose to stay there) is a consideration too. While home ownership has costs if the complete mortgage including taxes, etc is $650 and an apartment is $650 moving to one won’t really save money.

Overall (again I do not know their income level, etc) it does not seem these folks bought an unreasonable home. It’s not like they have a $1,400 a month mortgage and a $2,400 take home or something. These folks do not seem to have a house problem, they have an income problem.

Onto the prep discussion:

Really conflicted about this as I am pretty into preparedness and all that stuff. That being said I honestly do not think this family needs to be worried about making preparations for some SHTF or economic collapse scenario. It is my belief that they are currently in a pretty nasty situation that if handled wrong could potentially leave them ‘outdoors’ and that this gal, and by extension her spouse, need to focus their energy( emotional as well as physical), time and resources towards figuring out the situation they are currently in. All the way from the short term of next months bills, the mid term goal of them getting the income up enough to stay current on essential bills including the mortgage and the long term goal of replacing some or most of their income so they can get some breathing room, have some financial stability and get this stress out of their lives.

Also if they are intense and fix this problem in 3-6 months and are back to normal in a year think of the energy, intensity and resources they would be able to throw at preparedness,

Put it like this: Lets say there is a bear out in the woods near your home being a jerk and eating people but there is an angry wolf in the kitchen. Yes the bear is bigger and more dangerous but THE WOLF IS IN YOUR KITCHEN. The bear *might* be a threat someday but THE WOLF IS A THREAT RIGHT NOW!!! Also if the wolf kills them today it doesn’t matter what great plans they have for the bear whenever it maybe shows up.

I cannot in good conscience recommend putting any meaningful amounts of money (if a few batteries, cans of food or a box of ammo for the family gun makes you feel better than by all means) into preparedness until the family is:

A) Current on basic bills. I do not care about a visa card but do care about the mortgage, water, sewer, electric, insurance and the like.

B) Making enough money to stay current with basic bills and life needs, even if at a new lower standard and.

C) They have $1,000 saved for Dave Ramsey’s baby step 1

However since it is part of the discussion. 2k rough breakdown:

Food- $600 to start. Split between easy to eat stuff like canned goods, PB&J, etc and rice n beans.

Water filter- $150. Basic Berkey setup like a

Go Berkey Kit

. Or if handy you can do the bucket and

black filter element 

route. Total $750.

Alternate cooking source- $80. I would go with a basic 2 burner Coleman camping stove and several gallons of fuel. Purchased used these can often be had under $50. That leaves thirty bucks for fuel. Total $830.

Lighting- $90. A couple

good candle lanterns

and

a bunch of candles

. Say that runs $60. Spend $30 on batteries for whatever flashlights are already in the house. Total $820.

Medical- $80. We could square this a lot of says. Lets say they spend about $30 on some sort of

decent basic first aid kit

(or find a knowledgeable friend to help them assemble one) and the rest on OTC drugs and various disposables: band aids, Tylenol, benadryl, 3×5 gauze, etc. Total $1,000.

Defense- $600. There are a lot of ways to go here. I laid some out in my

Basic Guns series

. Peters recommendation for a good basic pump shotgun like a Maverick 88 or Mossberg 500 is sound. Personally I would try to get a handgun. That is a whole nother ball of wax. I like revolvers but if you don’t care about common calibers a Makarov or whatever commie nation clone in 9×18 can be had for under $200 USD and ammo is dirt cheap. If you want to stick to wheel guns and are willing to shop a serviceable (I would ask to test fire) Taurus or Rossi .38 can be had in the same price range. Toss in some ammo in

9×18

or

.38 special

[Incidentally

Lucky Gunner has a case of CCI Blaser .38 special ammo for $329/1k

] and call it $250.

Used pump shotgun such as a Maverick 88 or Mossberg 500 in 12 or 20 gauge. Factor in about $200 for the gun, $70ish

for a case of bird shot

to get everyone familiarized, some buckshot at least 100 rounds though

250 rounds of buckshot

would be even better, a  few

slugs

and that closes out defense.

 Total $1,600

Additional Fuel- $225. Fill up whatever gas cans they have, ditto the BBQ grill. Maybe get an extra 5 gallon gas can and fill it up or extra fuel for the Coleman stove. If there are decorative storm lanterns in the house get some fuel for those. Whatever is left after that goes to batteries for flashlights, the ambiguous AM/FM boom box, etc. Total 1,825.

Hardware This and That- $100. A roll of clear plastic to temporarily replace a broken window, a tarp, some duct tape, a but of rope, etc. Logically fill some shortages in existing tools and stuff. Total $1925.

Comfort Items- $75 (Remaining Balance). During hard times it is nice to have some comfort items. Mom likes tea or coffee so get some. Dude likes salted pretzels so get a few bags. Kid #1 likes gum so get some. Kit #2 likes chocolate so get a couple big bags of M&M’s.

Total 2k. (Edited to include: Think I messed up the math on this by a C note. It’s too late and I’m too tired to go back through it. If that is the case pinch a few bucks from each category to get it back to 2k.

So those are my thoughts on that. What do you think?