This is a guest post and entry in our non-fiction writing contest by Tony
It doesn’t take an SHTF event for you to need your preparations. In fact, there is another danger looming over the heads of many in America that could drastically change their lives on any given day. That is unemployment. Fourteen million people are officially unemployed now, millions more only able to find part-time employment, and many millions more worrying all the time when they will lose their jobs too. In today’s economic environment, unemployment could hit any of us at any time, but it doesn’t have to be the end of the world. In fact, it won’t even be painful at all if you have properly prepared.
The economy and unemployment
The U.S. economy took a serious downturn at the end of 2007 which quickly became what I call the Great Recession. The housing market crashed, unemployment spiked upward, many businesses failed, and the entire economy contracted. Government stimulus spending, Federal Reserve dollar-weakening initiatives, and huge bailout packages have left us with more government debt than ever in history while doing nothing to jumpstart the economy as advertised to do. According to experts, this recession ended in June 2009 when economic activity hit bottom and anemic growth began. Big businesses in this country have, for the most part, regained profitability with some posting huge gains, but this has largely been accomplished through government assistance and reduction of expenses by laying off workers. For most individuals, especially those who are out of work, the recession lingers.
President Obama assured the nation that if Congress would pass his stimulus package that unemployment could be kept under 8 percent. They did pass it and almost immediately unemployment rose above 9 percent. It has only been below 9 percent for one month any time since then. By the official count, about 14 million people are unemployed. However, since the federal government’s accounting methodology only includes people who have actively sought employment during the last four weeks, those who have given up on finding a job, are under-employed, are have been forced to take part-time jobs just to try to make ends meet are not even counted. This means the real number of people unemployed is actually over 20 million, something in the neighborhood of a 15% unemployment rate.
Why unemployment won’t go down
Unfortunately, I don’t believe unemployment will go down in the foreseeable future for several reasons. First, with a slight reduction in Japan’s taxes, the United States now has the highest corporate income tax rate of any nation in the developed world. These taxes, along with excessive regulation and outright direct interference in private business make it very expensive for businesses to expand and hire employees in this country. Fewer people working means less spending, which further disincentives companies from hiring.
The second problem is outsourcing. Due to the government influences discussed above, many companies have moved entire operations overseas where it is cheaper to operate and produce larger profits. Even when companies don’t completely move offshore, many are outsourcing aspects of their business to other countries where labor is much cheaper. With our high cost of living, there simply is no pool of cheap labor available in this country.
Finally, while technology has done much to improve our standard of living, it has also reduced the labor necessary in many sectors of business. Companies are now able to produce more than they could a few years ago even with fewer people. Those jobs lost are not coming back.
This all works together to create permanently high unemployment. Anyone could be at risk of losing their job, but this doesn’t have to be bad news. Let’s look at where our money really goes and what we can do about it.
The big expenses
Upon careful analysis of monthly expenditures, most people will find that the vast majority of their money, usually 75% or more, goes to only three or four big expenses. The mortgage payment or rent is by far the largest monthly expense for most people. Food, between groceries and eating out, is usually the next largest expense. On average, a family of four spends about $950 on groceries every month. This one is hard for many people to visualize because it is split between a number of trips to stores instead of just one big check going out each month. Car payments for one or more cars can cost as much as groceries. Finally, for some credit card debt rounds out the top four big expenses.
The solution
If you can simply get rid of those four big expenses, you can live on very little money. You can live on so little money, in fact, that you no longer need a job. Sound crazy? Read on for my four step plan for how to do this.
The plan to beat unemployment
1. Get mortgage-free. You could do this by just paying your mortgage payment every month of 30 years if you can resist the urge to refinance and keep paying for a long time, but it will take 30 years to get there. In today’s uncertain economic environment, that’s pretty risky. A better option, from the preparation perspective, is to find a much cheaper alternative so you can pay for it quickly and then get rid of the mortgage ball and chain.
First, you have to find cheap land. Fortunately, land that is well-suited for self-sufficient living is frequently less than desirable to the masses, so it will cost less. There is actually a huge supply of very cheap land available in this country. A quick search of the companies which specialize in rural land such as landwatch.com or United Country will yield a large listing of three to five acre parcels for $20,000 and less. You’ll even find many for under $10k. At these prices, you can take out only a small loan which can be repaid quickly or even save up your money and buy without a loan.
Next you have to build a house on the land. Since approximately half the cost of construction goes to labor and the contractor’s profit, you can save significantly by building your own house. The smaller you build, the less it will cost. Using alternative methods such as cordwood masonry or strawbale construction or building a yurt can cut costs even further.
You could also buy land with a fixer-upper house and refurbish it yourself to save big. Finally, you don’t even have to have a house. You could opt for an older mobile home or travel trailer to get the cost of housing down to just a couple thousand dollars. That’s only one or two mortgage payments for most people. Even though many people have lived in trailers for many years, I still recommend using this as a temporary solution and eventually building a house when you can do it without going into debt.
2. Grow your own food. It doesn’t take nearly as much land as you might think to be self-sufficient. You can grow all the fruit and vegetables that an average family will need on a half acre or less, though it does take careful planning and a lot of work. You can easily add chickens for eggs and meat. Other small livestock such as rabbits and goats also take very little space and goats can provide milk as well as meat. If you want to keep a cow, this is where the land requirements grow, but even so, you can keep one and raise her calf for meat each year on less than five acres. With a milk cow or goat you can produce your own milk, butter, cheese, and yogurt. There are still a few items such as flour, sugar, and coffee that you probably will not be able to produce.
3. Dump your car payment. If you buy a new car, you are giving up several hundred dollars every month. With two cars, as most families have, you could be shelling out over a thousand dollars a month. Buying cars a couple of years old will save a lot of money, but you will probably still have to finance the car. If you are willing to go with a car that is a few years old, you can buy a dependable used car for about $5000, pay for it with a much shorter loan, and still have a lower monthly payment.
This will allow you to quickly escape the car payment altogether. An even better option is to save up money and buy the car without ever taking out a loan. If you are ready to take the slightly more radical step, buy a $1000 car. This might sound risky, but there are a number of ten to fifteen year old cars out there which can be bought from private owners at around a thousand dollars that are still very reliable and have many miles left in them.
4. Reduce other expenses. For most people this means pay off your credit cards. A good way to approach this is to pay only the minimum payment on all but the one with the smallest balance. Pay as much as you possibly can on that one. When you get it paid off, add the amount you were paying on it to the next lowest balance each month. Keep doing this until you get them all paid off.
Start a cottage industry to make money. Even after you take all the actions above, you will still need money for taxes, gas, insurance, the food items you can’t produce for yourself, and a few other expenses. This will be really small compared to what you were paying with the expenses above included, but you still need money nonetheless. There are any number of things you can do from home to make money. I recommend using several of these strategies at the same time so you don’t have to make as much from any source and if one stream dries up you still have others.
Some examples of things you can do to make money include selling on eBay or Craigslist, lawn care, handyman service, errand service, and selling at farmers markets, flea markets or craft fairs. Online you can make money by selling a product, advertising income if you have a large enough audience, or writing (textbroker.com and similar companies). Of course, these are just examples intended to provoke thought. There are countless other ways you can make money, especially when you only need to make a few thousand dollars a year.
Flexibility
This is a flexible plan. First, the steps do not have to be completed in the order listed. They can really be done in any order. You may not wish to complete every step, but doing any of these things will improve your financial situation and make you more prepared if you do face unemployment. Finally, even if you do complete all steps, that doesn’t mean you necessarily need to quit your job. If you want to, then you will be in a position where you can. If you want to keep working, you will just continue to improve your level of preparation.
This is an entry in our non-fiction writing contest where you could win:
- First Prize) Winner will receive a gift certificate for $170 worth of Winchester Ammo donated by Lucky Gunner. A Smith & Wesson Heat Treated Collapsible 21″ Baton and a copy of my book Dirt Cheap Survival Retreat.
- Second Prize) Winner will receive a Wise Food Storage meat bucket and 3 dozen Tattler Reusable Canning Lids donated by LPC Survival.
- Third Prize) Winner will receive a LifeStraw water filter system donated by Eartheasy and a copy of the Wolf Pack Cookbook.
{ 45 comments… read them below or add one }
Great article! One of the best written so far in my opinion, as far as grammar and overall readability goes.
My wife and I have finally decided to start prepping and have slowly begun to do so. I’ve been wrestling with the feeling that I might be a little off my rocker for wanting to stock pile large amounts of food and other supplies that we might need some day but hope to never use. That idea alone is hard to grasp. I’m stock piling for something I hope never happens. But, to look at it through the lens of some day getting a pink slip seems much more plausible to me than TEOTWAWKI. I work as a machinist and make parts for the oil and gas industry. My company, on average, goes through a turn-over period where many workers are laid off every five years or so. After reading this article, prepping takes on a whole new meaning. Not to mention, work will become less stressful the closer my family and I get to being fully prepped. (If one ever does get to that point)
Keep the articles coming M.D. Really enjoyable to read!
Thanks for your kind words Foxtrot. I’m glad it was able to help you in your reasoning for preparing. And I agree wholeheartedly that taking these kinds of steps to prepare yourself for getting through unemployment takes a ton of stress out of life.
Just one comment about home refinancing. I was once on a 30-year mortgage but when interest rates fell I refinanced to get a 15-year mortgage which only increased my monthly payment by $30. By adding another $25 to the payment every month I can pay that loan off in 14 years. Every home situation is different in terms of home value, equity, interest rate, etc. but refinancing and paying extra on the principle balance can sometimes allow a guy to become mortgage-free in half the time.
What I was refering to about refinancing in the article is people who pay on a 30 year mortgage for 4 or 5 years, then refinance with another 30 year mortgage. A lot of people do this over and over again and end up paying a mortgage for the rest of their lives without ever gaining much equity in the house.
I completely agree with your points about refinancing a 30 year mortgage with a 15 year mortgage. With the drop in interest rates over the last few years, a lot of 30 year mortgages can now be replaced with 15 year loans for only a very slight increase in monthly payments.
Another way to look at your mortgage is that it will save you a whole bunch of interest if you pay it off ASAP. I almost view it as a better investment that going the way society tells you to, and investing in mutual funds and stocks. AND you don’t have the uncertainty. You can figure out exactly how much you will save. I figured I could make $35-40K on an investment in paying off my mortgage in 5 years instead of investing in Wall Street. Not sure if Wall Street would beat that or not, but given the uncertainty these days, I went with the certainty route. Once that mortgage “ball and chain” is gone as someone posted, you are one step closer to freedom.
I live in an area that attracts snowbirds and eventually many of our winter visitors move here permanently. There are many 55+ communities, although the average age seems to be twenty or thirty years older. Well, you guessed it. Smoking deals are available on gently used cars — you know, low mileage cars that were driven to the grocery and the library and parked the rest of the week. So I would recommend seeking out bargains in senior communities.
Tony, this is a great article. Thanks for sharing.
that’s how we got our 2005 ford sports trac, a gentleman wanted to sell it to get out of debt, showed us the payoff and only asked for 250 dollars more. got it for 1,575 dollars cash from the bank after agreeing to take over the debt.
Very well written article! Common sense? Yes. Need to remind everyone? Yes. Great motivator? Oh you bet!
Nice article Tony. I am semi-retired and have a home with no mortgage, no credit card debt and have two paid off vehicles . So I’m part of the way there. I wish I could say it was part of a master plan but it was just chance. Lost my business, large home and most of my savings. Kept the rental property and the two vehicles. But as you point out, when we learned that we didn’t need all the ‘stuff’ and ‘luxuries’ that we were accustomed to, our income, though vastly reduced, is now more than sufficient for our needs. In six years I can collect SS. Maybe.
I do want to get a piece of property in the boonies by next year .
With our extra income from cutting our expenses this is doable without a mortgage. Now growing our food will be the next challenge. Here in the Sonoran desert I have tried to grow things with very limited success. But we want to buy at a much higher elevation and we will give it a go there.
Great prepper subject. Probably more important to the big picture than the myriad of articles about guns and gizmos (which are not entirely unimportant by any means) I see on most sites. Well written post sir.
I live near you (at least as regards the Sonoran desert) and it IS tough. As a suggestion (it’s worked reasonably well for me) try doing a container garden so that you can move it indoors if you need to (snap freezes or scavenging animals). It’s a lot less work than crawling around on your knees weeding even a small plot. Plus I save a lot on water. I’ve managed to raise a surprising amount of vegetables from containers (even potatoes using the barrel method!). My next plan is to build a greenhouse so that I can expand my container garden to a bigger and more dedicated area….
May give it a try. Thanks Jeff.
I like this article. I am dreaming of one day having a nice piece of property. (I have been saving money for a while and have a little stockpile.) The advise to get out of credit card debt is good, though rather than paying off the card with the lowest balance, I would suggest paying off the card with the highest interest rate or at least transferring the balance of high interest cards to ones with a lower interest rate.
Countries that have large unemployment numbers also see crime rates soar , If not corrected , these nations face riots , and eventually civil war …………….. dont think it cant or wont happen here . Bad economics gave rise to Adolph Hitler , Mussolini , and one of the main factors of the Russian and French revolutions …………………….when you have nothing , then you have nothing to loose . Obviously , I’m all for prepping or I wouldn’t be on this site , but if things dont get better and there is an economic SHTF , all your preps wont mean a tinkers damn in the long run . You may be forced to leave your homestead by roaming organized bands of Trogs and Zombies . If you dont have the manpower to defend your stead , you will have to leave . Also , if there is a violent anti government movement ( like a civil war ) , all your preps are subject to seizure by the feds or the rebs . Not saying dont do it , economics is just one reason among many to prep , but that is a reality .
T.R. makes a good argument for more thought about caching supplies. Your caches don’t have to be way out in the hinterlands, just good and hidden in a couple of different locations.
There is truth enough that there are larger issues of government and corporations which are a part of the reason for the prepping concept to start. Having ones own house in order is an important start. Preventing those things you mentioned is the second and larger part of [my] prepping.
Monster corporations and government programs will indeed lead us to the disasters that many are prepping for. For example, the Federally funded School lunch program is adding fruits and vegetables as a ‘healthy’ cover in order to support more immigration for farm labor – a giant workfare and free lunch welfare program that increases the population, while millions are out of work.
The reason companies and government would be interested in doing away with their customers is called “The Protocols” – another big plan that the interested student should research.
Make a list of your favorite federal expenses, research them and educate yourself on them, discuss them with friends, neighbors and co-workers, blog them online, write to action groups and later, to elected officials. Do the same with the social agenda issues. A long time ago, a long haired country boy ‘turned the tables’ on the money changers, the religious and legal leaders and brought their systems to their knees. Their power center was destroyed and later, Rome burned and Nero killed himself.
In addition to the first priority of personal prepping, one’s best defense is addressing the issues that will lead to the feared scenarios of SHTF/TEOTWAWKI and warding them off. This won’t come without some social and personal pain, but it will lead many others to take Tony’s advice in this excellent article to heart and to begin their own personal action plans. Too often we tend to strain at the gnat and attempt to swallow the camel. Let us not fall under the same chastisement as those leaders who were told …
“Woe to you, scribes (media) and Pharisees (religious and legal leaders), hypocrites! For you pay tithe of mint and anise and cummin, and have neglected the weightier matters of the law: justice and mercy and faith. These you ought to have done, without leaving the others undone.”
Good observation T.R.
Good Article by Tony
Digital_Angel_316
Tony – Good article, but (always a but) for me, the 800 pound gorilla , is taxes. I won’t list them, we all know the chimps that make the gorilla. Other than food, I’ve outlived the rest of your Big Four. But (always a but) man, those taxes never go away. Jeff
Great article! Thanks for the tips and the web sites!
Good article! I agree with everything you said. If I had written it, I would have included the idea of not getting into debt in the first place, somehow. I was talking with a niece, explaining to her about prepping and not having debt, and she said she thought it was impossible to live without debt. I tried to explain to her how to do this but she just wouldn’t hear it. Young people are so inculcated into the debt society we have that they just can’t perceive life without debt.
One more thing, I’m planning on building me a tiny house to retire in. The tiny house movement is becoming more and more attractive since the downturn in the economy. It’s something single women can do for themselves, is cheap and can be mortgage free if you work it right.
I love this article! I have been trying to teach my children that debt is life sucking, debilitating and just bad for your health.
We have a slightly different strategy, but everyone will do what works for them. We have a farm mortgage we can easily afford. We did so, buy buying something was a rock bottom price in the perfect location, and building up what we needed from there. We can not pay off the mortgage and prep at the rate we feel we need. We figure in our cost of interest every year, and decided for right now, to call it rent. Our property value is double what it was when we closed. Though, we have no desire to sell.
We built nice clean outbuildings, greenhouse, and woodshed from recycled, or cull lumber. Reject/sale windows, used doors. Garage sales finds. We work like slaves. But the results of hard work are clear. We only pay day labor for farm work and never hire contractors.
We put two mortgage payments back in savings for emergency.
We have alot of good credit, in the form of zero percent credit cards, and building center cards (0 percent for 12 months), and a small bank that lets us borrow at great rates. We use these for buying power. ONLY for building materials, prep supplies, guns, and ammo at deep deep discounts. We pay it off the next month or two. The small stuff we pay cash for.
For example, a $10,000 5 acre 8ft permeter fence that we are building now. I have been stockpiling the materials for 4 years. I saved well over $3000 buy buying materials on sale, in bulk, and having the credit to do it.
We do not use credit for restaurants, clothing, groceries, vacations, etc. Actually, we haven’t had a family vacation since we starting prepping. Big Sigh.
The cards are locked in a safe and only used when we both agree. We only owe $100 in credit card debit right now.
We have clear goals set, and plans for everything. ( I hope) Including loss of job.
For us, we don’t see being totally debt free as a way to become fully prepped right now. When we have met the goals we have set, we will pay off the mortgage. I know it might sound backward. But, our fear is….SHTF while we are slamming money into a mortgage and we starve. Hmmmm.
Mama J, you just raised the one concern that we have had.We lost all but a minimal income..around 200$ a month for 2 years, then we have an increased, but stable income with no job. We have struggled with this problem of choosing food/ the repairs on our home….Having food in the house and enough put back to last a reasonable amount of time…took priority with us. The house is fully paid for, we have no credit card debt and all the vehicles we have are fully paid for.. there are other things we need to feel secure in our location, due to helath concerns of us and my parents we won’t be going anywhere, but digging in and lying low in our rural setting. Trying to work out some places to cache, but with limited space that is very hard…These problems are so very individual to each persons situation…it sounds like you have tackeled this problem together in a logical and methodical manner…and what we are taking away from these posts is …that’s what we all have to do… Thanks for a concise explaination of your reasoning…
Ack! I read this after hitting submit. Sorry, I should not multitask when commenting. My typos are terrible. My apologies.
Typos not so terrible. Ideas very sound.
Good article. Currently unemployed and trying to live off odd jobs and my preps, so this definitely hits home for me.
Lauren,
Amazingly, I have talked to many people who believe that it is impossible to live without debt. People have been so thoroughly indoctrinated to play into our consumerist culture that many just see constantly paying interest on debt as a normal part of life that cannot be avoided. Fortunately, this is not true.
An earlier commenter stated that my whole article is common sense. I agree that it should be, but the masses out there just don’t get it. That’s why I write about these topics – it seems so obvious to me but I encounter people like your neice all the time.
I like your thoughts on tiny houses. There are many examples on the internet of single women who have built tiny houses themselves. I have written more extensively on my blog about building mortgage free including small houses and using alternative building methods. If you click on my name you can read more about them.
Thanks,
Tony
and more people should learn how to grow their own food. whether it’s in your backyard, on your balcony, or on your two acres. The Dervaes family of Pasadena CA grow 7000lbs of veg on their 1/10 acre city lot every year, organically. The produce their own biogas for their vehicle, eggs from their chickens and manure for the gardens. What an inspiration. With Monsanto and the like trying to take over our food system for profit, one healthy alternative is going to be growing your own. Monsanto is not our friend. There is no profit in giving us healthy food to eat, no profit in keeping us healthy so we don’t have to go to the Dr. and use expensive phamacueticals, no profit in having us grow our own, so they patent life and we can’t reuse the seeds. It’s all about money and the sooner we realize that the better.
oops, I forgot that’s exactly what you said in your article. When I get up on my soapbox it’s hard to remember what I’ve read …lol
I’m with you about Monsanto, Laurie. I’ve been reading up on what they are up to (with Bill Gates), and it’s truly evil. They are setting up for complete collapse of our food sources…unless we use their chemical products. And even that is not sustainable long-term. I would hate to see what people will be eating in 40-50 years…if it takes that long.
I have thought for a long time that it should be REQUIRED that EVERYone grow SOMEthing…whether just a tomato in a pot or whatever. If that was so, our food situation would be so much better. But, alas, not to be….so those of us who are thinking about these things must grow our own…on whatever level we can.
And you are so right…it’s all about big money.
I think in a hundred years, people will look back and think “were they out of their minds to use so many chemicals?” We have the highest rate of cancer in the WORLD. There is a reason for that. We are what we eat! In Europe, they have banned the use of GMO’s and chemicals until they are proved healthy. Our bought and paid for govt and corporate food companies have decided to use us as guinea pigs until it is proven UN healthy. There’s the difference. Europe cares for it’s citizens and in America, everybody and their health is for sale. They are all traitors and whores in my opinion.
Not everybody can grow their own food. Some people live in apartments that don’t get enough sunlight and they can’t afford a grow light. Some people are too old or too infirm. And some people don’t want to. Is it right to force them to?
And does it make sense for a company to want to kill off its customers? I don’t know if everything written about Monsanto is true because many things are written about companies that are eventually proven to be completely wrong. But if it is that big of a worry for you, then by all means grow your own food. I suspect, however, that as a result your food selection will be very limited and your success rate may be far less than anticipated. That’s why people turned to buying foods in the first place.
Right Lint, can’t force free Americans to grow stuff.
I suppose market and social forces – rising food prices, potential scarcity of some food stuffs, rising awareness of the need to prep, etc will make people begin gardens who never did before. My father told me about all the Victory Gardens of WWII. Perhaps……Survival Gardens?
People buy ready made foods because it’s easy and it’s cheap. Which is one reason Americans are so fat. You are right tho, some people can’t grow their own food at their apartments but if you want to eat healthier and grow your own then you can “rent” a part of someones backyard for the cost of a few vegetables. A person can save 100′s of dollars a year when they grow their own. Again they do this in Europe all the time. I know in England they have long waiting lists for allotments because gardening is so popular over there.
I don’t believe in forcing people to do anything. But I do believe Monsanto and the like are doing everything they can to make money off our misery. You might read about how they went to India and made them dependent on GMO cotton and when it didn’t work for them it caused mass suicides, Google it. Our food system is being hijacked right under our noses, that’s why I grow my own veg.
Lint I’ve gardened all my life and you obviously haven’t if you thing the selection is limited. Hundreds of heirloom varieties out there to be tried.
Don’t worry we won’t last 100 yrs if Monsanto releases thet chemically tainted corn into the food supply…raised it for bio fuel and trying to get clearance to sell it for food… the newspapers in England said it caused liver cancer after three months… what a wonderful way to reduce the population , I just believe that all them should eat and feed it to their own families for two years before it is released… then we’ll see what they say…
I quite enjoyed reading this post, for ourselves, as for your list, 3 down and one to go, I am hopeful that we will have the farm payed off by another eight years.
One of the things that drove my hubbies family was that we bought a small (to them) home on a small farm.. but it was done in such a way that if something were to happen to my hubby that meant he could not work, that I would be able to keep us a float.
Yes we have insurance but it will only take you so far, and better to be prepared for that just in case.
We run a balancing act as well with all the signs that the future could be quite rocky indeed between putting more money to pay down the farm or do you put more money into takng us off-grid and to build pantry/farm etc.
Farmgal,
Sounds like you and I are in the same boat juggling the debt free life and becoming sustainable at the same time.
I like to think my hubby and I are doing a good job, and feel good about what we have have accomplished. Our mortgage will be paid off the same day the SHTF (just kidding). That would be my luck. “Dang, I shoulda bought that truckload of toilet paper, but instead I paid off a note to a company that doesn’t exist anymore.”
Hi Mama J
That’s just how it feels to me Juggling, trying to work the now, plan for the needs of now an the current and far future and worry about the “What ifs?”
To be honest its the “what ifs” that give me the most trouble to plan for and to figure out small steps on that will add up to a whole if you know what I mean?
Tony, I agree with everything you stated except one. I happen to believe that buying a new car with cash is the only way to go. Here’s why: 1)3-year or more warranty, 2)nobody else has had a chance to abuse the vehicle before you get it, 3)you know exactly what’s been repaired and what hasn’t for as long as you own it.
I buy new cars with cash and then drive them until they start having mutliple problems – usually around 200,000 miles. By then they are about 10-12 years old and I’ve saved enough money to buy another new one. This requires a lot of self-disciple because saving for a new car can be difficult – you see all that money in your account and you want to spend it on something else, but creating a savings account strictly for a car purchase has been my way of dealing with the temptation.
Living a debt free life is the only way to go. I’ve been debt free for 19 years and figure at this point I couldn’t qualify for a loan even if I wanted one – no credit history after all these years.
Pay cash, let the government wonder what you’re up to. LOL
Too late Lint. They know what you’re up to now! Probably charge you with felony frugality.
That’s funny!
Sometimes letting the government wonder still gets you in there sites.
I remember a family who bought a house for cash and the local police set up a watch on them because they did not think they should have that kind of cash.
In that case it turns out they were trying to set up a drug lab in the country.
The only reason they were even on the radar was because they bought a house with cash and the police did not think normal people did that.
Great article. Reminds us that living within our means and keeping out of debt is the best prepping we could ever do. The system is weighted against us. Good tips on how to beat the system.
I wish we had been prepping when my husband lost his job four years ago.
We went from 110,000 a year to 560 maximum unemployment and childs support had to come out of that. We woke up when we started couponing out of necessity. We got rid of our brand new mini van and now have a four year old car almost completely paid for with a warranty. We are working towards getting our savings back to get out of our expensive house and buy a much cheaper one. live simple. We have no credit cards anymore. I will never have them again. We started growing food last year. Good advice. cutting things like cable and cell phone minutes. Eating out less. We had no vacation last year. My hubby works two jobs now to pay what one did. but we are working towards saving to buy another home and sell this one. with the loss of equity from the economy we lost 70,000 in equity. We would need money at the table. We used retirement not to lose the house when he lost his job. It goes real quick with a large mortgage. So we are saving to sell and buy at the same time. Not easy but we are being really frugal. We are examples of how close you can come even with savings to losing it all in this economy. We put 20 percent down had a big retirement account. You think you are doing it all right. Around here people used their house for retirement also. Not any more! I don’t think it will ever be that way again.
Now my brother in law worked in investments after 17 years just lost his job and we are teaching him to prep.
the only thing i can add- and i have to qualify this by saying i am a home builder- is if you build your own home- you need to know what you are doing- if you try and save money by not having the slab engineered and you are in a bad area- you will be paying for it sooner or later- also in our experience – the subcontractors- the good ones dont give you the same price as they do builders and the bad ones dont do things right or wont be around if you need them later- our profit margins are on the discounts we receive from our suppliers and subs. also in our state- the person that builds is liable for the slab and structure for 10 years. just another opinion and facts we have run into-
While some tend to view all debt as bad, I tend to look at debt in shades of gray. Many hard lessons I have had to learn first hand.
I do not have any credit cards. Paid all of them off years ago and closed them. Thanks to the Veterans Administration’s inept handling of my personal information, identity theft is a huge problem for me.
The only type of debt I’d consider at this point is for property or a vehicle (SUV or pickup) that serves a function.