A few days ago I watched a useful YouTube prepping video, 5 Things You Must Do NOW to Prepare for 2022, by City Prepping, which was a follow-up to his video on the top 10 threats we’ll face in 2022. He begins his list of 5 things to do with simplifying your finances by budgeting, cutting expenses and eliminating debt:
Talking about financial stuff isn’t an area where I feel like I have any expertise, but here are some of my learned from the school-of-hard-knocks personal finance thoughts. Money habits are like most of our other everyday habits, that most of us either grew-up practicing or kind of slid into without a whole lot of thought or consideration. Once I actually start learning more and honestly assessing many of my ingrained (and hard to break) habits, I almost always realize there are better choices available. It’s a real struggle to change ingrained habits, but I’ve found even modest changes can reap big benefits. Changing some of my bad money habits hasn’t been as hard as trying to change some of my bad eating and fitness habits, which I’m working on.
I’ve seen online prepper and various survival advertising centered on the argument that we’re headed toward a catastrophic economic collapse as a reason to not trust in banks or even cash, but to think about dramatic (and risky if that worst case financial catastrophe doesn’t happen) financial moves to survive. Sure, there might be a massive economic collapse, but placing your entire personal financial planning effort based on that worst-case scenario might lead you to be woefully unprepared for the multitude of everyday (and much more likely) emergencies that are way more likely to impact you. I can’t buy new tires or pay an emergency medical bill with gold or silver coins, so for me I prefer to stick to cash and traditional financial savings and investment options. Living on a modest income, I prefer to have roadside assistance and rental car coverage on my car insurance policy and having money in emergency savings over dabbling in bitcoin or other investment options sold as preparing for a catastrophic economic collapse.
Yes, the worst case is definitely possible, but I’ve experienced many of the more likely emergency situations and decided where I want to focus most with my emergency preparedness efforts. This preparing for the most likely emergencies first rather than the worst-case emergencies approach makes more sense to me. I don’t believe people, who haven’t even learned to weather the more common emergencies in life, can become prepared for more dire emergencies, just by buying all the right survival gear or abandoning safer financial savings and investments. In other words, you can’t buy your way to preparedness.
Experience and then learning from my mistakes helps me feel more prepared to weather harder challenges. It’s like with needlework, where it’s much easier to start with a small project, master the techniques and gain some confidence when I finish than to start out with some large and very complicated project. This year my husband died, so I’ve had to rethink a whole lot from finances to my entire life and adjust. One of my husband’s hospice nurses, a widow, advised me not to make any big decisions for at least several months and to keep my daily life as simple as possible. I heeded her advice and it has helped me plod through each day.
With personal finances, I’ve made plenty of mistakes over the years, but I did learn that even a few modest cuts in non-essential spending, frees up some money and just a bit extra could help dealing with the inflation that’s already happening or allow you to put some money into emergency savings. Simplifying personal finances and your overall lifestyle makes you less dependent on all sorts of products and services you were consuming. Finding cheaper or free forms of entertainment can help with becoming more self-reliant.
Along with the chaos in the supply chains, I have already seen prices going up when grocery shopping and some wild price fluctuations with other purchases. I purchased a Christmas gift at regular price for one of my grandchildren online a few weeks ago and that same item, from the same seller, has now jumped $50 in price.
At the grocery store, I’ve been focusing on stocking up on basics and paying more attention to prices. I also often check prices online now, before even heading to the store, to aid in making my list. Making a list and comparing prices makes a difference, as does spending more time looking through my pantry, fridge and freezer before making a list. Last year I did some grocery shopping online that I picked up at the store, but I prefer to walk through the grocery store and see what all is there. Plus, I want to pick out my own fresh produce and meat.
Many people carefully meal plan too. I haven’t been diligent with meal planning ever, but I’ve become much more aware of thinking about how to use leftovers to make other different meals before I even cook a meal that I know there’ll be leftovers. Another area I’ve been working on for years is cutting down on food waste, especially with throwing away fresh produce, which happened way too often in my kitchen. Before I even consider buying larger amounts of fresh produce that are a “great” deal, I think about how I’ll be able to store it or preserve it to avoid waste.
Sometimes I pass on those “great” deals, because if food ends up thrown away that’s money thrown away. This same concept applies to other purchases too. If you buy mountains of stuff that are “great” deals, but it never gets used that’s waste. With prepper gear, tools, extra supplies or anything else you stockpile, figuring out how much money you want tied up in 10 of this or that vs. money in savings for all those common emergencies life throws your way should be part of your overall financial planning. I would opt for a few good quality tools and more money in savings for the unknowns rather than having 10 of every tool or piece of gear imaginable. No money in savings or even worse prepper gear on credit cards to pay off isn’t really sound preparedness, in my opinion. These kinds of financial decisions are personal choices, but this type of critically making decisions on all of your purchases is a good money habit to develop.
Truthfully, there are way too many unknowns trying to focus on preparing for such a massive catastrophe as a world economic collapse. It’s too big of an event for our minds to grasp all the ways it would impact every system our complex modern world relies on, so I suspect the best preparation there is to focus on the basics and streamlining your lifestyle to live as simply as possible. The Amish and similar types of communities that have a very simple, sustainable lifestyle seem to be less impacted and able to recover more easily from major emergencies than those more reliant on all the complex systems of modern life. The key there is community, so along with all the personal preparedness, trying to build some relationships, friendships and trust within your own community can start with just a few friendly words or even small acts of kindness. The more people you know who are nearby, the less you’ll feel like you’re completely on your own in bad times.