How to really be debt free and survive the next big disaster



Investing and Economics

This guest post is by Augustino

A crucial part of my preparations for the chaos and turmoil that I sense lies ahead, is similar to a three leg stool. If either of these legs is removed the stool is rendered useless except perhaps for firewood. So the three legs to my survival stool are 1-Shelter; 2-Food & water; 3-Defense.

BUT keep in mind that the three legs of my stool MUST rest upon stable and level ground and that level ground is being financially sound. Financial soundness results from numerous aspects of my economic health. I feel that I must have a source of income, in fact numerous sources of income are better.

We have an eBay account whereby my wife sells art work. I also have an active Craigslist income. I sell this and that and when I see a yard sale I almost always stop, buy anything I think I can sell and then do just that. And speaking of yard sales I have as many of those as possible. I also sell items on several on-line sites where what I’m selling is appropriate.

Now one aspect of, and way to increase your income and create a positive cash flow, is to do away with debt. So for the most part, any extra cash I earn from the methods mentioned above, I use to pay off credit card debt. Over the course of many years I was not into preparing for the chaos that likely to hit the USA, I was one of those “sheeple” convinced that if I couldn’t pay cash, well then reach for the credit card! What a fool I was. Now the cards are gone, sure I have one for emergencies or car rentals but for the most part its cash or no purchase.

The approach I use is to put together a list of all my debt. I put account number; phone numbers; website addresses; BALANCES of course; interest rates; payment due dates & minimum amount due along with any other related info. This document is on my computer and I review it regularly to make sure bills are paid on time to avoid late charges as well as to consistently update my balances and keep a running total of debt.

It’s inspiring to see that debt figure go down, incredibly rewarding! I list my debt with the least amount owed first, next least amount and so forth. I target the card with the least debt owed and hit it with everything I can muster. As I see balances vanish I then shift focus to the next debt on that list. Doing this provides me with a degree of control over this debt, and psychologically what I needed is control. Now as I pay off one card, the cash I was sending that card now goes to the next card I’ve targeted for eradication.

And I’ll progress this way until ALL the debt is gone! Then the extra cash will go into a cash stash probably in silver, maybe some gold but if times get hard as I say they will, I feel that a well stocked basement with food, water, and other supplies will be far more valuable than a safe filled with gold & silver. To a hungry man, to a man looking to feed his family, a bar of gold becomes miniscule when compared to a bucket of dry food like beans and rice along with a few cans of SPAM.

I want food & water and couldn’t give a rats rear end about silver or gold. In fact the person with ample food & water and let’s not forget a means of defending those supplies, but a man with ample food & water can most likely end up owning a ton of gold & silver after the food and gas prices skyrocket due to a super volcano like Yellowstone or that New Madrid earthquake in west Tennessee.

Sooner or later the USA is sure to experience a Katrina like event that will spew an exponentially greater amount of chaos and inflation upon US. And those that are financially “fit” stand the best chances of waiting out this upheaval. The way I see it is that if a person, if a family is of the mindset to get their financial house in order, it’s safe to bet that they will have the degree of discipline and insight to make a solid prep plan that includes supplies, shelter and defense of those items.

So the solid, level ground that my prepping rests upon is being debt free. :-D

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Comments

  1. JP in MT says:

    Your advise and examples are good ways to get out of debt. Being debt free, I feel, will be the most important “prep” in the coming hard times. Short of a complete breakdown of society, being debt free allows you freedom of movement, and freedom to reallocate your limited resources to where they are most needed.
    In the past 16 years I had 3 good job opportunities that I was not able to take advantage of because I was upside down in my house. My other consumer debt didn’t allow me the flexibility to run a second household while I waited for this house to sell. I have since fixed that.
    I less than 2 years we will be debt free as the house is the last payment we have to make. This time may be shorter as I too take the extra money that we make and put to toward our bills or save it for unexpected repairs and such that used to put us further into debt.

    • JP – great points you make about leaving yourself the flexibility in the event of a crisis.

      Having an income outside of your “normal” one is something I am writing about now. I think that is one of the most critical preps you can do.

  2. Michele says:

    I agree with you that gold and silver are not nearly as important as food and water. If TEOTWAWKI event happens, I’m thinking gold and silver will be pretty much worthless when no one (except the preppers and Mormons) have food – like hyper-inflation or a major EMP.

    • After WW2, the favorite currency was cigarettes. Perhaps wine or chocolate as well.

    • village idiot says:

      Don’t count on gold and silver being worthless in a hyperinflation, Michele. There is an account, perhaps it was in The Vampire Economy, where an English citizen walked into a bank in Germany in the 1920s hyperinflation and bought the entire bank for one gold coin, a British Sovereign. And we’re talking about the bank building and everything in it. I fully agree that beans, bullets and band-aids should be taken care of first, but to have worthless dollars instead of gold and silver would indeed be a tradegy. There should be some way of storing value and wealth. Gold and silver have been a medium of exchange and a store of wealth for 5,000 years, it’s doubtful the demise of the US will change that fact.

      • wildwood one one says:

        The way GB and some of the the other talk shows to whom I listen push “guns, bullets, and gold,” I actually have a question. But first, I admit gold and silver may be good for investments. But if the SHTF and I have a can full of 1 ounce, 1/4 ounce gold coins, or even, 1/10 ounce coins, and I need bread and milk what do I do, pay a 1/4 ounce I paid $1,600 for in exchange for a loaf of bread and a quart of milk? Or, am I expected to get change back in gold?

        • Hunker-Down says:

          wildwood one one,

          Go to coinflation.com and look at silver dimes and quarters. One of those coins may be closer to the value of a loaf of bread post TSHTF.
          You can buy ‘junk silver’ on eBay a few coins at a time.
          I prefer to have wheat and powdered milk in the basement, and some junk silver as a backup means to get more in a barter society.

          • JP in MT says:

            You can also get dimes and quarters from Provident Metals (http://www.providentmetals.com). I can get s slightly better rate locally, but that is dependent upon availability of someone selling when I have the money to buy.

            • Provident is a great site. I have bought from them many times. I’ve sold to them as well. They’re fair and fast. I completely disagree with the original author of the article that gold and silver will be worthless, but then I don’t see an instant collapse but a slow and painful decline. In declines like the Wiemar Republic, precious metals become a fantastic way of preserving any wealth your family had. Real estate lost value (sound familiar?), you had to have a wheelbarrow of paper money to buy a loaf of bread, but an ounce of gold could buy you a city block of homes.

              I purchase 90% junk silver coins from either Provident or my local store. If you want to buy a loaf of bread you use a 1960 silver dime, not a 1/10th ounce gold coin. Even in normal times silver has retained value. But in a crisis? PMs will be the only trusted and measurable source of value that can be easily exchanged. Your ammo won’t buy my #10 can of potato flakes if I don’t use your caliber or if, as in my case, I don’t need ammo. But your silver dollar might buy it if I feel we have a fair trade and I know I can take that silver dollar down the road and buy something I want from the next guy.

        • village idiot says:

          wildwood, one must get their beans, bullets and bandaids completely squared away before even thinking about gold and silver. Only after you get food, water, g&a, and medical supplies should you think about using gold for storing value, not for currency. However, I do like the 1/10 oz. gold coins the best, and prefer 1 oz. silver eagles or maple leafs and junk US silver coins for my silver. I don’t use them for investments, but for insurance. I believe junk silver coins will be the new de-facto currency if we have a SHTF event.

      • charlie (NC) says:

        The purpose of gold (I don’t have any) is as a way of preserving your excess wealth. When you have all of the beans and bullets you need or as much as you can use before they go bad and you still have cash, you need to do something with it. Post shtf gold ming or might not have immediate value but it is scarce and durable and you can’t say that for paper currency. My family has lived in the US South ever since the late 1600′s to early 1700′s. They went through the Revolution and the Civil war. Those are the two big shtf events in our history. When I was a teenager my great uncles house burned. Among the things lost in the fire was a small sea chest about 2/3 full of Confederate Currency. Now before someone tries to start a north south thing, they lived in the south and had no choice but to convert their currency to confederat paper. This was my mom’s family and most of them worked in hospitals during the civil war because they were religeous consencous objectors so this isn’t a north south or slavery thing. The point is that all of their wealth was in confederate paper and it was a worthless curiousity after the war. If it hadn’t burned 50 or so years ago it might have had some value today but at the time it was just paper. Maybe they had some gold. I hope so but it they did it was still good after the war, unlike the currency.

        Every now and then you hear about salvage hunters finding spanish gold coins on the ocean bottom in salt water that would eat steel, aluminum or obviously paper. However, the gold coin has laid there on the bottom since the 1500′s and looks just like it did the day the boat sank. That is why you own gold! You can bury it and if no one finds it and steals it, it will be right there like you left it 100 or 1000 years later.

        • village idiot says:

          charlie, I’m proud of my Confederate ancestors. I had them in all three Condederate armies, and they fought in every theatre and every major battle, from Pleasant Hill to Chickamauga to Gettysburg. They fought for their home, none owned any slaves, and all were farmers. There’s nothing to be ashamed of, they did their duty. We’re getting ready for Decoration Day right now, and I will be cleaning one of my ancestor’s graves this weekend, getting it ready for new flowers the Saturday before Memorial Day, the same day we have our family reunion. Can’t wait for the fun and fellowship. I also don’t harbor any ill will against the Union forces, they did their duty as well.

          • charlie (NC) says:

            village, I’m equally proud of my confederate heritage. My fathers family fought in the war in the NC State Troops.
            As I said, most of my mom’s folks were consencous objectors but served in the hospitals. The reason I put the “disclaimer” in my first message was just to make it clear that I wasn’t trying to start a discussion about the war, pro or con.

  3. Re: How to really be debt free
    I just paid off my house, my last and biggest remaining debt. Debt free now for the first time in nearly 30 years. Augustino is right. He is outlining the “Dave Ramsey” method I followed. It took me nearly 6 years to shed the 150k in debt I had, but it worked. It’s about organizing the debts in a spreadsheet, reviewing the data regularly (daily/weekly) and never taking your eye off the ball. It works folks. It really does work. I am now able to buy silver and supplies with no worries. It works. You can do it too.

    • village idiot says:

      Congratulations, randall, that must be a great feeling. Now you are free to do as you please, just so long as you pay the taxman. We’re never really free of him. LOL. Continued good luck.

    • farmmomwannabe says:

      Randall,
      Congratulations! Paying off all debt has to be about the hardest prep! That is my goal, and I hope to be there in another year, or year and one half, depending on “surprises” we all have. That must be so empowering!

    • robert in mid michigan says:

      ramsey was teh ticket for me as well, all debt gone save the house payment. although i am going to lose that beause of the owner defaulting on the land contract. but as the prices are low on property i have a chance to get a better place for less. (have to be positive about this or ill scream and do something stupid.) sometimes we have to look at the hurdle in the road and accept that god has decided the easy road was not where i was supposed to be he needs me in another spot for his plans. this may be the blessing i have prayed for and just dont know it yet.

      god bless to all
      keep prepping
      keep praying we are the crazy ones

  4. Amateur Gardener says:

    I just finished paying off an old $3000 debt – took a year to do it. It was from an OLD closed credit card – and I couldn’t recall what I bought, let alone if I still had the items. I know some say not to close cards, but I made an exception in this case. Made me feel so foolish because that was money that could have gone for other things, ie retirement; but I’m glad it’s gone. I probably saved hundreds of dollars in interest payments. Good riddance!!

  5. Not that I disagree on being debt-free, cause I don’t in general. Buying on credit and making minimum payments is never good. But, making money often requires having some seed money to start with. I know a guy that put a mid-5 digit inheritance into gold back in 2000 instead of using the money to pay off his house. He’s very happy with that decision today, and he’s still got the gold in case the SHTF.

  6. On Track says:

    A most excellent piece! I am doing precisely as you are to eliminate debts. I am a Dave Ramsey fan (and voluntary facilitator) also. You may wish to consider Mint.Com as a resource. It is a free website, simple to use, encrypted well, and you can gather all of your financial accounts in a “read only” Mint account. Being free, it helped me greatly to consolidate my holdings at one site, so I can go to one site, have all my accounts update real-time. It helped me set up a simple but useful budget, which has helped me to find “leaks” in my spending habits and then to increase my preps. It has a host of charts, on-line help videos, and is also free. It is the brain child of a young fella, who was bought out by Intuit, the financial company. Did Imention “free”? Disclosure: Nada, as I receive no compensation from either Mint or Intuit. Check out the Mint.com website.

    • If you want your finances “in the cloud” for Big Brother or hackers to read, then sure, do that.

      • SurvivorDan says:

        Why PP! Surely you don’t believe that the gov’t would abuse such data if they ‘needed’ to for the greater good? ;)

      • cooolwoods says:

        Hey! Penny Pincher!
        maybe we all could upload all our info to carbonite! free trial!
        “just give us all your info for a free trial!”
        excuse me while I throw up…..
        “wait! dont waste that puke! we’ll double the offer! send us a dna sample too!”

        orwell just dug himself out.

        sorry I was just looking over my shoulder

        stay safe

  7. As embarrassing as it was, bankruptcy took care of the staggering amount of unsecured debt I had racked up trying to shore up a failing real estate business. Now all I have is mortgage and car loan. I paid bills on time before, during, and after bankruptcy (except the ones I discharged, those I paid on time only before). I am frugal, the debt was almost all due to failing business.

    I am no longer embarrassed about this. If you are drowning in debt and you think you can do better after a bankruptcy, then get one. Especially if you are getting reamed for interest. They created the money out of thin air to begin with. Let it go back to thin air.

    • robert in mid michigan says:

      in my oppinion

      bankrupcy was put in place for a buisiness who got in over its head (your real astate) and as such i have no problem with someone who made an honest attempt to make a better life for themselves and for what ever reason it failed(have my own personal experiance with this one) then yes we need bankrupcy for this situation. you can even include this for people who as an example worked long and hard to buy a home and car that they could afford then one of them has a stroke what have you and they are no longer able to live this lifestyle.

      i do however have a problem with those who take so much credit that thier is no way they can afford all the bills then declare bankrupcy and are able to keep most of the stuff for pennies on the doller. to me this is playing the system, and makes those who have a legitamate claim look and feel bad about thier current position.

      i know from experiance the embaresment one feels from not being able to meet thier bills do to buisiness failure. i am glad you are past the embaressment and also know that you take no pride in it either. i just hope in the future you are willing to once again lay it all on the line in an attempt to build your own piece of the pie that is the american dream. the pursuit of happiness is a cornerstone of the American dream and one our greatest appeals.

      god bless

  8. Here’s one for the wolfpack. Last year at just about this time I was absolutely debt free. 100% – no cards no mortgage, etc. I was even fortunate enough to have had about $40,000 in the bank. That money in the bank was earning something like .1% interest. Inflation as you are all keenly aware meant that money was definitely shrinking.

    I was also renting a town home with a lease that said they could entire my home anytime with a 24 hour notice, etc – not that I have anything to hide, or they ever really did it. However comfortable I was there, I knew it wasn’t really “mine”. My storage food and preps were in “my garage” a garage I didn’t even own.

    So last March I very deliberately chose to go into serious debt. I took out a 120K mortgage at 5% interest for 30yrs (even though I am a huge Dave Ramsey fan and normally would consider 15yrs). Why did I choose debt? I bought a duplex so now I am a “homeowner” – although with mortgage and state taxes that can be argued. I rent out half my place to some great people who pay me $700 a month on my $925 mortgage payment – so $225 instead of $850/month rent. I also got a useful third bedroom for my new second baby boy.

    I was and am expecting inflation (not the wheelbarrows of money type just 1970s or a little worse). I liked the idea of agreeing to pay someone dollars 30 years from today at only 5% interest. I felt like my dollars in the bank were shrinking, and I thought I would rather see my principle shrinking – especially when I will likely increase the rent to some extent over the next 30 years but will only ever have to pay $925/month.

    So was I being unwise in taking on debt? Should I work hard to pay it all off in somewhat valuable 2012 dollars as compared to the inflated 2022 or 2032 dollars? Am I in some way less stable living in my own home for currently $225 a month than I was renting for $850 a month?

    I’m really not sold on the idea that all debt is bad. Particularly if you think you see serious inflation coming. I’m not arguing that you go out and max out your cards with terrible interest rates. But it you can make a deal that works for you today (225$ mortgage rather than $850 rent) and that will only be more in your favor with rising inflation, how is that a negative?

    • robert in mid michigan says:

      i dont see a negative here, owning your own home is a great thing. i would make sure you have a few months payments set aside for any rough times ahead. renter moves out what have you. i agree not all debt is bad, some will argue that debt invested rite now is a good thing. i do not agree with this line of thought. buying your own home= good debt, i would try and pay a few bucks a month extra every month to really put a hurt on the loan and pay it off as soon as possible. thats me i hate worrying about how to pay for something if the bad comes a knocking. for me it always hits me when i am down.

      the most important question is not what we think about it, in the end the question is are you happy with your situation?

      • Robert said: the most important question is not what we think about it, in the end the question is are you happy with your situation?

        All in all you are 100% correct, but I have found the comments here are very diverse and usually very thoughtful. I often find lots of issues I had never even considered when I read the comments.

        I wanted to hear from people in case there are some issues I had never thought of. Thanks for being part of that.

    • Mike M – congratulations on your purchase.

      Re your question – only you know your reasons for borrowing…I bought my first house 40 yrs ago – still own it, and am reaping the benefits now…won’t go into all the ups and downs…we all know them.

      So, good to see you are thinking long-term…you have children, so never know how the future will turn out – so good on you for having a go…

      Re the out of pocket cost to you, with the tenants paying off the remainder…have you taken advantage of all the tax benefits you are entitled to..e.g., can depreciate the building itself, but any contents therein.

      Only on the portion you are renting out though…but check with an accountant for your specific tax rules etc.

      Think fences, driveways, hot water units, stoves, kitchen cupboards, shower recesses/bathtubs/vanity basins / carpets/ceramic tiles etc – have a depreciation company come in and prepare a schedule for you – and your accountant will set it up – so that you will get to keep a greater portion of your Pay As you Go income (personal exertion income).

      Also, keep all records – forever, not just the time the tax office tells you to…Your depreciation schedule, accountant, bookkeeper costs are all tax deductions. When you come to sell that duplex…your lawyer will need the purchase records/expenses etc.

      As you occupy 50% of the area/mortgage premises – can legitimately claim 50% of the rates/property taxes, building and contents insurance costs etc…

      Also, if you allocate a spare lockable room for yourself to manage your property – can also get a further deduction – depends on the square footage of that area…some of the items you can claim are your laptop/printer/all inks/photocopy paper, postage, stationery, lockable filing cabinets, USB sticks to back-up files, cost of off-site storage /safe keeping of important docs, office desk etc…

      Also, consider when you get building insurance, to take out landlord’s cover…this will cover rental income loss if/when tenant’s default on rent.

      For example…tenant absconds or fails to pay rent – and by the time you have your Termination Order and Warrant of Possession – you may have a substantial amount of rent arrears – your insurance will reimburse you…it doesn’t happen often, but when it did happen, was good to receive all monies due…and then the insurance goes after the defaulting tenants.

      Always use a recognized template for your tenancy agreements – your state should have an organization where you can download these docs for free.

      Take photos of the place – before and after each tenancy -for insurance purposes etc…there may be a natural disaster – etc.

      Also, in case you have a dispute over the condition of said items with the tenants.

      I treat my tenants well – they are my bread and butter.

      If any tenants are on gov’t benefits, can set up to be a service provider, i.e. private rent – and that way the rent is deducted from their payments, as is the phone, electricity account etc…

      If you have any items therein, e.g. refrigerator, air-conditioners – keep a book with all the model/serial numbers…I add to this as and when required.

      Any invoices from tradesman, use a separate manila file or 2 ring binder with clear sleeves to keep invoices handy…and ready for tax time.

      Set up a computer program to record your info into a rent ledger. Ensure all rent monies received leave a clear paper trail. Don’t make trouble for yourself.

      Also, don’t know the equivalent organization on your side of the pond…but over here, I am a member of the Property Owner’s Association of Queensland…annual membership $70 gives me access to tenancy databases, so I can do a background check on viable/possible tenants…if they have been blacklisted – it will show up – again don’t make trouble for yourself, do your due diligence.

      Re – mortgage payments – get ahead…do this by always paying more than the amount due…you mentioned 5% interest…so, use a free online calculator and in the space provided change the 5% to 10% – and the difference in payments is what you add/or arrange to have paid each week/fortnight. If you have an expensive month…just use the pending button to move one of more of those extra payments to a later month…

      For example –mortgage of $120K @ 5% x 15 years – monthly payment is is $949. (can see your set up is 30 years, however, no need for that, as it is all interest thrown to feed the beast (banks).

      Both Interest and Principal components at this early stage of 12 months into the mortgage are on a par, with a remaining balance of (-) negative $114,487.

      However, if you can arrange to make the payments at 10% interest your new monthly payment is now $1,290. That is $341. How can you achieve this…see next paragraph…

      As you can see, for the extra monthly payment of $341 times (x) 12 = $4092.

      This amount is then divided by 52 (weeks) to reveal $79 p/week is the extra required.

      This is the amount you add – and it sits in your pending account – and is transferred to your mortgage account weekly to steadily reduce your mortgage, and gets you ahead at the same time…

      then, if you have an expensive few weeks/months…move these pending payments to the next few months. Only for an emergency though…and to ensure you don’t have to move these pending payments, see next paragraph….

      So, if you can, set up another account – a savings/maintenance account, call it whatever you want – this is to ensure you always have cash available to pay the inevitable maintenance that is required on houses.

      I set aside 10% of my gross income away each week on an automatic transfer – when I have unexpected repairs – simply transfer monies from that account to the tradesman’s account via net bank…write the reference numbers on both the withdrawal and deposit on your invoice…or print out and file in 2 ring binder.

      If you need any other specific info…ask away..happy to help if I can…cheers…

      • Chloe, thanks for all the great suggestions. I’ll print these out and keep them handy. You are right, it has been an amazing tax shelter.

        I don’t want to suggest that our tax laws and policy are correct in a country that has 14-15 trillion in debt. I believe that debt will soon sink all of our boats no matter how clever a person tries to be in the short run. But because of pre-tax retirement, pre-tax health insurance payments, two kids and my home being 50% investment property – thus a write off. I got every cent I paid in back from the government – then they paid me $700 I never even paid in.

        I took it, but am not happy with the system. The government is borrowing money that my two boys will owe and pay for one way or the other – all to give me a happy hand out. Aren’t they great? NO!

        I would prefer to live in a country with a 10-15% flat tax rate with no exemptions/loopholes. It won’t ever happen. So I’m essentially on the welfare dole taking more than I give (at least in income tax) and unhappily participating in sending the country over the cliff. So, I do what I can with my vote, and prepare my family as best I can for when *it* comes.

    • Agreed on inflation Mike, our money shrinking in value that is. And I think buying property is a smart move too. “The time to buy is when there’s blood in the streets”, and the housing market is pretty bloody for the sellers nowadays. For anyone looking for a retreat/vacation/retirement home, might not get much better than this. Best of luck.

      • Thanks Red,

        I do think inflation is a real force to consider. That is why I will not choose to follow a few very reasonable pieces of advice from Robert and Chloe. Paying down my principal ahead of time is the way I have always lived my life. It has worked for me and it is that sort of thinking that allowed me to always stay debt free (My wife and I just paid cash – bundles of 100s – for a replacement for her car). However, I will not be doing that – at least not for a few years. I am going to purposely keep the debt.

        I just don’t trust that the government and the Federal Reserve will be able to keep inflation in check. I don’t want to use my somewhat still valuable 2012 dollars to pay down principle that I can pay off with 2022 dollars – that I believe will be worth much, much less. To my bank a dollar paid to principal is the same dollar today or 20 years from now. I don’t think it will be the same dollar for me. Today’s dollars I scrimp and save for each one – and for a buck I can buy about 3 pounds of rice or 2 pounds of wheat – both of which my family eats almost every day. In 2032? No one really knows, but most of us think they’ll be worth a lot less. So, I’ll be like congress and keep kicking the can down the road so I can pay off my mortgage with those (probably) less valuable dollars.

  9. recoveringidiot says:

    Good article and a very important subject. If you are drowning in debt and can’t afford any preps when the S hits the F you are SOL.

    I let a spouse take me over the bankruptcy waterfall. Lost a house and land that would have been paid off in less than 5 years. Always know what your partner is getting you into and don’t be afraid to disagree if you think she/he is wrong. It might cause some strife but better to get that out of the way now than later when the boat has sunk. In my case she just stopped coming home after all the credit was gone so I would not be any worse off if I had been the SOB that I was afraid to be and stopped it before it got started. I let my heart overrule my brain and that failure cost me everything.
    Watch your spouse/partner if they have access to your money/credit, people change and you might just miss the changes and lose everything before you realize its happening.
    BTW, I am ashamed of declaring bankruptcy and will be until I’m dead. Just the way I am.
    Whine/rant off.

    • ….Hi RI, can still hear the pain and hurt you have gone through…no one judges you…when you can, let time heal you.

      We all learn harsh lessons… let me say that I know where you are coming from.

      You will move on, and have a better life – as I now have, and am so thankful now that I learned my lessons well – but at the time – it was difficult.

      My DD remembers that time as well, and the thrifty and frugal lessons I used have been passed down to her as well…and I am still frugal – and we both know that money doesn’t buy happiness.

      So, seek peace within yourself when you can and are ready.

      And, forgive yourself – as at the time you made those decisions, you only had the info at hand to go on as a reference…now, looking back, you can see what can be done differently for next time.

      You are much stronger now than before – lessons have been learned, and will never get you again…so, that is a good thing.

      Take care and God Bless…cheers. …

  10. 1982MSgt says:

    This is what I did prior to retirement the final time:
    1. Paid off all credit cards.
    2. Paid off the Car.
    3. Paid off the house.

    Planned my budget at 55% monthly income for wife and myself.

    Retired USAF MSgt 1984, with 30% disability from VA (Deaf -L, Tinnitus -R).
    Retired Boeing Employee 2000.
    Retired on Soc. Sec. Nov 2008.
    ===> Cost of Living increases on all except Boeing retirement.
    Put yourself in a positive situation. Stop paying others the high interest rates.
    ===> Save for BIG ticket items. DO NOT CHARGE on credit cards.
    Everything is working as planned. Prep and Pray.

  11. SurvivorDan says:

    Sound premise(debt free) and I am nearly there. While V.I. is doubtless right that gold will always be valuable and useful as a store of wealth, I can’t eat gold and silver. After food and water – I put my ‘savings ‘ into ammo and tools & hardware (including fishing tackle, fasteners, rope, tarps, spare plumbing / electrical / auto parts, cooking utensils and stoves, spices, etc.
    In the event of TEOTWAWKI (or lesser calamities) I can use all those things. Gold is indeed more portable in the event of a bug-out but I can and have cached some of my bulky ‘savings’.
    To each their own. This is just my way…..

  12. robert in mid michigan says:

    i know many will have scene this on other sites but for those who didnt i would like to post

    http://www.nypost.com/p/news/opinion/opedcolumnists/how_us_debt_risks_dollar_doomsday_j8dxHSYWUa22QpSN7ttOIL

    nypost saying the dollar may collapse, and the government needs to quit adding to the debt. check it out.

    really keep prepping
    if the libs are catching on it is scary

  13. arkieready says:

    Debtlessness is devine. I miss it. Credit card is about $1200. Had to help ds get transportation & ins. Plus a car repair. No car payments, house or land payments. Im homesteaded, so taxes are less than $100. DH, on the other hand, has a car payment & almost finished paying off the 5th wheel we live in. Ds, dd, sil & tots will live in my old mobile thats paid for. my few weeks of brokedom are behind me & i can pay up. yay!!

    • 1982MSgt says:

      arkieready-
      Work at paying your debt off ASAP – that is your goal.
      Of all the things I faced that were frustrating for me was the family car breakdowns, that were always untimely – when strapped down by the family budget. Been there – it was not fun – but we got through it – so will you.

      Set your goal – continue attempting to achieve it. Problems will slow your progress – so be flexible – keep to your goal.
      Best wishes for you and your family’s progress. Prep & Pray.

  14. charlie (NC) says:

    forgot to check notify

  15. Uncle Charlie says:

    I have been frugal all my life. My “friends” say I am cheap. While I have used credit cards most of my life (I don’t like carrying much cash), I always paid them off completely, because I don’t like debt. I can’t sleep well being in debt. I even used to buy new cars with cash because if you can pay off a note, you can save up to buy…same discipline. For example, I bought a Ford Pinto in 1971 for $2,000, base model stripped of course. It helped that I got the Ford employee discount because my father-in-law worked for Ford. Later when new cars seemed to get ridiculously expensive, I moved to used cars, still with cash. I finally broke down and got a pick-up truck with automatic transmission and A/C (otherwise base model – no cup holders) because I figured I deserved it when I was in my fifties.

    I got my first house in close-in Atlanta for $36,000 in 1975 which seemed terribly expensive at the time. I got a $26,000 loan at 6%. It’s a good neighborhood today but it was considered questionable at the time since half the houses had been torn down for the Jimmy Carter Expressway which later never came to fruition.

    My kids always wondered about why they had to see movies 6 months later than everybody else because I took them to the 99 cent movie theaters and smuggled in food so we wouldn’t spend a fortune on snacks.

    When a mighty oak tree had to be taken down in my front yard before it fell, I was aghast at the price so I told them to leave it in the front yard in 3 foot section. I bought a “monster mall” I saw in the back of some magazine (probably field and stream) and a chain saw I can’t remember the brand of and started from there. I then found a cast iron wood/coal stove at a Sears outlet at a further discounted price since it was missing a part and was fully assembled. After taking the fire brick out, I actually carried it from the back of that Pinto to the front door (needless to say I was much younger and stronger at 300 LBS in the seventies). I turned off the gas furnace for several winters after that. It heated most of the house pretty well but it did get a little nippy in the kitchen. My sarcastic sons used to wear their coats and hats in the house to prove a point, but that wasn’t really necessary except for the kitchen where perhaps I was a little cheap in not getting a space heater. But then the stove would usually heat the the room somewhat at meal time.

    Today, I am debt free thanks to being old enough to outlive my mortgages. I have been very fortunate and been fully employed most of the time and was lucky to have insurance and a lot of sick leave built up when I almost died in the nineties.

    Sorry if I got a little verbose going down memory lane but you can keep debt down if you live conservatively and spend money on what you need rather than what you want. Of course that is not a much fun but then I slept better. Again, I was extremely lucky not to befall certain disaster and not to be laid off like so many in wolf have been affected. I guess it helps to be born at the right time. Of course everything is not completely rosy as the condo I bought 8-9 years ago is now worth half of what I paid for it but fortunately the homestead my EW lives in has held its value. Also increase health insurance costs are not figured into my cola calculations, but I could be a lot worse off. I sleep fairly well know except for thinking I might be to old and infirm to survive in my BOP, but with a more little luck I won’t need it before I die. Don’t worry, my son knows where it is and how to get there.

  16. Donna H says:

    My troubles were like yours, credit was everywhere and easy to get so I went in debt for a business that failed. Realizing a recession was upon us that caused my business failure, I prayed a lot for wisdom, a job to help me through, and what God wants of me to help him.

    My life of hobbies– primitive survival for fun and hunting and gathering, stopping the excesses, and making list of what I really need came together under God’s grace. What gave me more was giving to those who were starving to death, even though I was considered in the poorest of income brackets.

    I believe deeply the more you give to others, the more God will give back to you. I have paid off my line of credit loan and all credit cards early, I’ve got four jobs now, and since I have been doing God’s bidding, my finances have turned around. I give more now to help and the missionary I give to tells me I am saving lives. There is nothing more rewarding than planting seeds for God.

    Please let’s not forget our blessings. Even when I collect mushrooms, wild hazelnuts, rose petals and lambs quarters for a salad, is more than what others have. The money I saved on my budget went to them, and what enriched their lives enriched mine.

  17. On of our problems is that no one teaches kids about money. They seem to think that it will always be there when they need it. A lot of them graduate from college with massive loan debts and a degree in art history or philosophy. Try finding a job with that kind of degree. Then they cry about how no one warned them that choosing to major in something they thought would be fun was not the road to success. They are right–probably no one did warn them.
    I see on TV where people in their twenties with two incomes are looking for a house with at least 3 bedroom and 2 1/2 baths, stainless steel appliances, and granite countertops. They don’t realize that they will be paying interest and principle on the appliances long after they have been replaced. We bought a house in the mid-sixties, bought the appliances separately, and moved our appliances when the DH got a transfer 9 years later. We still don’t have stainless steel appliances or granite countertops, but we have a paid-for house on a lot large enough to have a garden.

    • Encourager says:

      We taught both our sons how to manage money and budget. However, the oldest had a girlfriend who convinced him she was worth going $10,000 in debt at 19. Then they broke up and he was stuck with the debt. It was a great lesson. We did not bail him out. Now he is frugal with his money.
      The youngest just graduated from college debt free. However, he has NO credit score. He just got a great job in another state, needed a car. Could not get a loan because of no credit score. We ended up co-signing for it….yeah, I know. Made me as nervous as a cat on a hot stove. However, he was able to rent an apartment without our help. He plans on paying the car loan off as soon as possible. Which will help him have a credit score. We never realized his living debt free would bite him in the butt. But it did.

  18. Having a pantry is money in the bank, remember to rotate and use what you buy and buy what you use. I have had to depend on my food stores in layoff periods.
    Down time means cutting wood from free sites like craigslist, more “money in the bank” My stockpile of cord wood was sold last winter and kept me solvent.
    The only good debt i know of is writing off the intrest on the house. The place I live now is near to work, My retreat place is paid for. Taxes will need to be accouted for at some point even after TSHTF. We’ll be useing paper still ,but in the outhouse. I saw alot of Europe when I traveled with the navy 30 years ago . Greenbacks were king ,we got the clean end of the stick with any transaction. I went to Rome for my 25th anniv. recently and offered Mario 3 twenties for a 40 euro item. He threw up his hands and backed away saying we dont take THAT! It was like I spit on his shoes and insulted his Mom.
    If I produced a silver eagle from My pocket we would have still been freinds. I do and will barter for and with metals. The federal resere is not a govt entetity and prints paper that is worth less every day. High stakes ponzy scheme with your countries wealth. It will be worthless in time as it is now worth less and less.
    A good balance is important in every aspect of our lives. you will never be able to eat gold but someone will always trade some goods or service for it, just as its been for thousands of years.
    Be smart now and learn how to survive on less , work and save and pay down any usless debt, store your foods you can buy or grow. Learn to can ,and preserve food and hone your skills in food production and procurement. knowledge is gold.
    A percent of my surplus always goes to food pantries. I will be acountable for my actions some day. How can i justify having a food pantry of my own if my neighbor was hungry.
    I practice canning now and sell the end products for seed money to buy cases of food for the food bank. I feel like I am paying back a debt I owe for my prosperity. Some is saved for me and the skills honed for survival are valuable. But its not just survival i am interested in, its Living
    JET

  19. Excellent Piece. A little over a year ago, I was struggling with debt and had no idea where to begin. I finally had enough so I sat down at my computer and wouldn’t move until I knew how to sell via the internet and it has been one of the best moves I have done for myself. I was able to pay off all my bills and have a positive cash flow coming in. Now that I have my cushion, its just now getting all of the necessary supplies while maintaining that cushion.