Total Survivalist Blog: emergency fund
Preparing for the worst can be daunting. It is also easy to focus on putting back several rifles, cases of ammo and everything else that goes along with it (Now you need some optics, a safe, spare mags, lights, another safe, etc.), or other emergency gear that we could spend hours listing. Let’s face it – acquiring the cool gear is fun! It’s also one of the most often talked about topics in this community. People like their toys and that’s perfectly fine. But it’s only one leg on your stool. Food and medical preps are covered to a lesser extent but still fairly regularly. Something I feel that is of equal importance, though not near as fun to discuss, is financial security.
I think many people avoid the financial preparedness topic because it can bring you back to reality: sometimes it’s hard to find enough to go around. How can you pay the bills, buy your beans, bullets, band-aids and still find money to save when disaster seems to be looming over the horizon? You better make room for it. That EMP may happen tomorrow or your small town might look like “Jericho” (TV series) next week, but I guarantee you sometime this year your own personal TEOTWAWKI will happen if you don’t put some cash back now. It could be a transmission that starts slipping, a layoff, an ER visit – Murphy will throw something at you when you least expect it. So where do we start?
Rotate Your Stocks AND Your Priorities
Several thousand rounds of center-fire rifle ammo and several reliable battle rifles for you and the family is a noble effort, but not at the expense of everything else. Set up some sort of system where all of your goals are slowly being met. One example can be found below:
Discretionary Spending Schedule:
Week 1: Guns and Gear
Week 2: Medical Supplies
Week 3: Trip to the Local Sam’s or Costco for Food Stocks
Week 4: Cash, Savings or Silver/Gold
Rinse and Repeat Next Month
It doesn’t have to be as rigid as the above example. I grocery shop at Wal-Mart; I’ll throw a box of 9mm and something for the first aid kit in the buggy every week on the grocery trip. I also will put some money back every week to slowly build our reserve. There is no right way to do this, find something that works and stick to it.
So, you’ve got some money set aside for financial preps. What now?
Cash is (for now) Still King
The manager at your local grocer is going to be pretty darn reluctant to let you leave the store with a gallon of milk for a 1964 quarter. Sure he may exchange it for some cash in his pocket but I bet you’re not going to get the most recent spot price from this transaction. If the power is out from the ____ (insert your regional disaster of choice – hurricane, snow storm, earthquake, etc. – here), chances are that credit card is not going to cut it either. Cash still has its place in your safe. One week’s paycheck is probably a good start to get you through most bumps in the road, especially if you already have at least a few weeks of food and a good first aid kit (you do, right?). For larger bumps in the road…
Make a War chest
Not literally, but treat your savings account with the same passion as you would a chest full of sharp pointy battle implements. A lot of folks say aim for 2-3 months worth of expenditures (everything from the mortgage down to gas for you vehicle). My wife and I are taking it a step further and have set the bar at 3 months worth of income (big difference). This is going to take some people longer than others; that’s OK. As long as you are making progress then don’t get discouraged! If an emergency comes up one month and it cuts your war chest in half then look at it like this: Success! You took a hit on the chin and are still standing! Our strategy has another benefit; life is all about timing. Opportunities come and go; if a great deal comes your way on a piece of land or something else and you have the spare cash to jump on it, do it. Just don’t look for excuses to raid your war chest. Make sure it is a worthwhile investment. Then proceed to build your savings back up immediately. Get your savings built up and then start considering…
Silver and Gold
How much precious metal (PM) is enough? It all depends on whom you ask. Just remember, PMs aren’t an investment (well they can be, more in a minute), they are insurance. Investments grow your wealth. Over the long haul, PMs will simply store your wealth. Short-term plays on PMs can be done to turn a profit, but buying and selling coins is the least efficient way to do it. You might as well trade paper gold on the stock market, and that’s not why we’re here. I once read a very interesting article that stated that an ounce of silver today buys approximately what an ounce of silver bought 2,500 years ago (I believe their example was loaves of bread). Try that with any fiat currency in the world! (Well, you can’t – it never stays in circulation long enough) We want to hedge against inflation. PMs are our insurance against the failure of our currency. Whatever currency becomes the world reserve when ours fails, silver and gold will hold value in that denomination as well.
My personal goal would be to eventually (long term) have 1 year’s salary in PMs. I think an 80/20 gold/silver holdings ratio is reasonable, but do your own Due Diligence and find what is right for you. You will probably want to start with silver, but at some point you have to switch to gold because silver gets bulky quick. I’d recommend starting with Pre-64 junk silver and 5-10 oz. bars. If you run across a good deal on some silver eagles, buy them! I bought some silver eagles last week for under spot! How did I do it? I deal solely with a local merchant who I trust completely and him likewise. I can’t stress the importance of dealing locally. If I find a 1965 dime (no silver content) in my roll I bought from my local guy, he graciously exchanges for a silver dime. No questions asked. Try that on E-bay.
I won’t talk about gold much because if you invest in silver first, by the time you are ready to dive into it, you will be fairly savvy with PMs; you will have done extensive research, right?
Now that we’ve covered some financial ground, let’s see if we can change the way we look at our other areas of preparedness to save us some money.
Streamline Your Gear
I have approached my firearms purchases in a manner that reduces the amount of different ammo we have to purchase. We have multiple pistols and carbines serving multiples purposes chambered in 9mm. We have also chose to standardize 12 gauge and 7.62×39.
A case of ammo in any of the above 3 calibers has the immediate benefit of being utilized by multiple firearms. Stocking up is much easier and cheaper.
Of course we have other firearms that are not in our standard calibers, but we don’t stock ammo for them like we do for the standard calibers. In theory you would want not only the same caliber, but the same brand as well. I say “In theory” because this is a tough one. In practice everyone in the family will have different tastes so it may be hard to convince everyone that carrying Glock 19s is in their best interest when they cringe when they have to hold the ugly bugger. A good goal would be to aim for full uniformity, and settle for caliber uniformity.
Another cost saving measure is go out and buy a .22 rifle and pistol if you don’t already have one as soon as it is financially sound to do so. This will obviously save you countless money over the years.
This doesn’t simply go for firearms. Try to buy battery-operated equipment that takes the same size batteries. Once again, this makes stocking up much easier and cheaper.
Make a Budget
The word “budget” can strike so much fear in a man, you would swear Hessians had just breached the privacy fence and are now occupying the pool house. It doesn’t have to be so scary, however. Your budget can be as loose or strict as you like, as long as it serves its purpose. One of the main benefits of the budget is it forces you to think through your expenditures.
I create a simple budget on spreadsheet that first tallies our income for the month, and then deducts all of our estimated expenditures. This allows me to determine our surplus and project what our end of the month balance should be in our account. If we surpass our goal, I do a little dance and then try to determine where I’m overestimating. If we miss our goal, we take step back and determine what went wrong. I don’t subscribe to the Dave Ramsey School of budgeting (budget down to the very last penny) because to me it seems like a lot of effort for not much of an improvement over my simple system. It works for many people, so I’m not knocking it. Find something that works for YOU.
Trim the Fat
Often people tell themselves that they just don’t have the money to save (you may even hear them say this on their brand new iPhone). They’ll say maybe next year, or after the house/car/boat is paid off or the kids are older/grown/etc. – that’s procrastination. One day you may wake up retired and struggling to make it; let’s avoid that outcome.
Internet, home phone lines, cable TV, cell phones, new vehicles every five years, too much house, etc. are all traps people fall in. I won’t tell you to turn off all of your services and move to the hills, but do take a rational look at your expenses and determine what you can reasonably cut or downgrade to allow you to put back some money. One thing I do recommend that has saved me over the years is brown bagging your lunch. Learn to love it. In one year brown bagging can save you enough money to buy that AR you want (Or – several pounds of silver).
Prepare for TSDTWAWKI (The Slow Decline of the World as We Know It)
TEOTWAWKI has happened for thousands of years, but the sun still rises in the east and the birds still fly south for the winter. If you were born in 1910 in Germany and lived 70 years, I’d say you lived through several TEOTWAWKIs (Weimer Germany, WW2, a literal divided nation, etc.). Our grandfathers and great-grandfathers had it hard at times; but they raised families, grew old, and hopefully were able to enjoy some sort of retirement after decades of work. The world may not end tomorrow, but it may slowly change for the worse for the rest of your life. Don’t rely on entitlement programs in your retirement years. Stock up on beans, bullets, band-aids and bullion, but also contribute to your 401K (at least get your company match, if offered), sock away some cash, buy real estate – diversify. Do not over-leverage yourself in our economy, but at the same time don’t rely solely on tangibles as a store of your wealth.
A true survivor plans for all contingencies. His portfolio is as diverse as his options. He buys cases of ammo and rolls of old coins, but he also contributes to his 401K to at least get the match his company offers. He has several acres of land in God’s country somewhere far from the city lights, but he also strives to be debt free. He has the cash on hand to G.O.O.D. and the savings and insurance to come back and rebuild (and the larder to live on until then). He doesn’t know the future so he prepares for all outcomes; no matter what happens his family will have options. He also recalls that Rome wasn’t built in a day, and American affluence has been squandered slowly for a while now; there is trouble on the horizon, so he starts now.