Financial Preparedness

Financial Prep Header

This week’s current events in Greece should highlight the importance of being prepared BEFORE something happens. As ATM’s ran dry, as the banks closed for days, as citizens scrambled to stock up on needed supplies such as food and fuel, the events have illustrated just how easily everyday life could plunge into near chaos.

What is interesting about these events, however, is that the crisis was not brought on by a natural disaster, physical warfare, or a health epidemic. It was brought on by simple economics…and all of us are at risk of the same fate.

So…how have you prepared for an economic emergency?

Emergencies of an economic nature can be on a large scale, such as what we are witnessing in Greece, or they can be events which just affect you and your family. It all depends upon the occasion. Whether it is a bank collapse, too much debt, or a job loss, any economic crisis can greatly affect you. However, the more you are prepared, the better position you would be in to be able to weather the storm.

So what should one do to prepare for an economic emergency?

First of all, you (and your family) should live sound financial principles.

  • Don’t spend more than you make. Learn how to make a budget…and try your best to stick to it.
  • Avoid debt like the plague. Easy enough to say, right? But our consumer driven society has made that much harder to live. However, you must face the fact that debt equals bondage, and that freedom from debt gives you just that…more freedom. Pay cash for as much as you can. If you can’t afford to buy something right away, then evaluate if the expenditure in question is truly a need or a want. Paying for food is need. Buying that latest new video game is not.
  • Build a savings. Everyone should have an emergency fund. If you don’t, you put yourself at risk to be right back in debt again if a common emergency such as an illness or a broken vehicle were to happen. Also, one should save for the long term. This would prepare you for longer emergencies such as a job loss.
  • Have some cash on hand. The events in Greece should prove to you that one cannot plan on retrieving everything from their bank account if a large scale financial collapse were ever to occur. Also, in the event of a power outage, either long-term or short, the ATMs would not function, and it’s likely that the banks would be closed as well.
  • If you choose to invest, diversify, and invest wisely. That old saying of “don’t keep all your eggs in one basket” rules here.
  • Pay tithing and give to charity. You may not agree with me on this one, but I am here to say from personal experience that when I give, I get far more in return every time.

Second, practice the principles of emergency preparedness and self-reliance.

  • Have a good emergency food storage plan in place.  Store what you would need, and know how to use it.
  • Store other needed consumables such as soap, toilet paper, household cleaners, etc.
  • Don’t live a throw away life-style. Learn how to repair things around your home such as household fixtures, clothing, computers, etc.
  • Learn how to produce food, clothing, etc. on your own. Have the necessary supplies on hand and practice these skills before you would need them.
  • Continue to increase your job skills. You would find yourself more marketable in trying to find a new job if you were ever to need one.
  • Live a healthy lifestyle.  Let’s face it…illness is expensive.

Practicing the principles outlined above would greatly enhance your abilities to endure any economic emergency. Of course, it should go without saying that living these principles would prepare you for a host of other kinds of emergencies as well.

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