Saturday, September 9, 2017

Financial preparation for SHTF

+ earn $50 for free.

The blog is going to take a turn from gun news to more of a prepping resource. I've been a prepper for many years, ten years on purpose and twenty years more or less because that was just the lifestyle I lived. I was a prepper before I knew there was a term for it. Disaster preparedness, not waiting on the end of the world, the Chinese are invading, survivalist (not that there's anything wrong with that).

I have a list of topics that I want to write about, I even have a couple of posts started and just haven't put the final touches on them, but this one is probably the most important post of disaster preparedness.

If you are financially prepared, you are ready to survive 99% of disasters that will come your way. I am by no means advocating to forego food and water storage, damage mitigation, or disaster planning. In fact, I'm a YUGE fan of planning and having a written plan in place for errorything.

If you have the money and there's a hurricane on the horizon, jet out, vacay in Colorado. Tornado, no prob, hunker down in the storm shelter until the threat is gone. Zombie apocalypse, you better start building that fort right now. Not everyone can afford to flee a storm and vacation in the mountains for a month, in fact, many Americans live pay check to pay check or even struggle to pay monthly expenses on time.

If you are struggling to pay your monthly expenses, your options are to make more money, spend less money, or both. Yes, I know, easier said than done.

How to make money:
One of the quickest ways to start making more money is to ask for a raise. Even a dollar raise will give you and extra $160 a month if you're paid wages. That's a good emergency stash for gas if you have to evacuate. That's nearly 1000 miles of gas on crappy fuel mileage.

If you have a skill, hustle up some side work on your time off. Can you detail a car? Find dirty cars and offer to clean them for $30 or $40. Can you cut grass? My first job was cutting grass, when I was 13 years old. I'd push my mower through the neighborhood and stop at every house where the yard needed to be cut. Think of what you can do and do that on the weekends or other time off.

Get a second job. Yes, you will spend less time with your family, but if you're having financial issues, there's a good chance you're also having issues with your partner. The break may be good for your relationship. Even a minimum wage job will get you about a $1000 a month. A grand can help a whole lot. If an extra $1000 a month doesn't help you, you're doing it wrong.

Get a tin can and beg for money on the street corner. Yes, that will be very humbling, but if the rumors are true, you might make more money begging than working. The rumors are probably false though.

Sell your things, check your kitchen cabinets for appliances that you no longer use and list them on craigslist. Check your jewelry box, maybe you've got something that you no longer wear or some crap that someone gave you, even 10k gold can be sold for scrap. If you sell scrap gold, the best place to sell is most likely a gold dealer, not a pawn shop, but call and ask. There are calculators online that can give you an idea of what you're scrap gold is worth (hint, not nearly as much as you paid for it). Rings with real stones will fetch more money if sold as jewelry on eBay or craigslist than they will get for just the gold content. Coins with 90% of silver content are worth more than their face value and sometimes more than their silver content, but you'll have to bring them to a coin dealer. Everyone hates parting with a firearm, but if you have a hunting rifle that you no longer use, maybe someone out there is looking for a used rifle. There are auction sites where you can sell firearms or maybe you can find a message board in your area. You can post on Facebook or craigslist, but your listing will get pulled down when someone complains about it.

Saving money:
Cut back on groceries, your grocery bill is one of the few expenses that you have great control over. I'm not talking about skipping meals, but eat cheaper. Have a Ramen night, that's $.20 per meal. I was a single father for thirteen years and we kept Ramen noodles on standby for times that I had to work late, or didn't feel like cooking.

Sandwich night. A loaf of bread and a pack of bologna cost less that $3, and will make ten sandwiches.

Go meatless, not vegan but just skip meat once a week. One pound of spaghetti noodles is a dollar, the Hunts pasta sauce in the can is a dollar, bam, a two dollar meal for 4. Not a huge money saver, but skipping the ground meat once a week can save you ten bucks a month on food.

Buy store brand groceries instead of name brand. Corn is corn, it doesn't matter what label is on the can.

Use coupons, if it brings the price down to below store brand prices. I understand that there are also coupon apps that you use on your phone.

Look in your area for a food pantry that gives food to the poor, if you're a veteran, seek help from the Veterans Affairs, VFW, American Legion, or other veteran groups in your area.

Apply for assistance from the Department of Agriculture.

A simple internet search will turn up a ton more advice on cutting your grocery bill.

If you drink alcohol, switch to a cheaper brand.

If you smoke, make your own cigarettes. I'm not talking about rolling cigarettes like you do a joint, but using cigarette tubes and a cigarette tube injector. The injectors range in price from about ten bucks for a manually operated injector to about a hundred bucks for a good electric injector. It will be even cheaper if you have a local tobacco store that stocks bagged tobacco and tubes. Search YouTube for videos to learn how to use your equipment so you don't break it. Making your own cigarettes can save you about 80% or more on your smoking habit. Of course, if you quit smoking that will save you 100%.

Switch from taking a hot bath to a short shower. To fill a bathtub with hot water, it will cost about $1 in electricity (I don't know what it is for gas, but I'm sure it's slightly less), a shower will run about $.25 - $.50. For a family of four, that's a savings of $60 or more per month just by taking a shower. That's not a huge stack of cash, but it will add up over time, and provide you more emergency cash for bugging out.

The average cost to run an electric dryer is almost $.50 (gas is slightly less), if you're drying two loads of clothes a day, that's nearly $30 a month, a clothes line and clothes pins will set you back only a few dollars.

Raising the thermostat on your air conditioner and lowering the thermostat on your heater can save you about 3% of your cooling and heating bill per degree you raise or lower it (it's more complicated if you use a heat pump for heating but works the same if you use a heat pump for cooling). While no one is home, turn them off (don't freeze your pipes or kill your pets through heat exhaustion).

If you car pool with just one other person, that will cut your commuting fuel in half and reduce maintenance costs on your vehicle. This could be a big savings depending on how long your commute is.

Get a roommate. If you live alone, get a roommate and cut your expenses in half, or charge a fixed amount. Expect your electric bill to go up about 20%. Just make sure you have a written agreement so that all parties are aware of the terms. An alternative to a roommate is to rent an empty room on Airbnb, especially if you live in the path of totality during the next eclipse, or if there is an entertainment or convention venue in your area.

Buy a car! Yes, it may be cheaper to downsize your motor vehicle and buy a car that gets better fuel mileage. This is really dependent on how far you commute to work though. I once worked with a guy that found it cheaper to pay a car note, insurance and fuel than the cost of fuel for his truck. His commute was 120 miles round trip though and gas was much higher than it is now.

Go electric! According to NerdWallet, driving an electric car can save you a couple of thousand dollars a year over comparable vehicles, or more if you drive a gas guzzler. If you buy new, you can save $7,500 on your federal income taxes and some states offer other deals for driving an electric car. Also, during the zombie apocalypse, it may be easier to build a solar charging station than scavenge for fuel.

Put the kids to work. It seems to be a trend that young adults are staying home longer, if they're not pulling their weight, you're doing them a disservice. Have a frank conversation with them about finances and they may be motivated to get a job and contribute, or provide more help around the house so that you, your partner, or both can work a second job.

There are a number of ways to get a small break from monthly expenses. If you're paying a house note or a car note, contact your bank and ask for a forbearance. If the bank agrees, they will let you skip a payment and add that missed payment onto the end of the loan, banks will usually do this once a year. You can also seek a loan modification that changes the terms of your loan and allow you to pay less per month, but for a longer period of time, if a bank does this, it's usually a one shot deal. If you are so behind on your home loan that you can't catch up, selling the house or defaulting on the loan may be your only option. The foreclosure process takes anywhere from several months to up to a year, which may give you time to save money, and find a place to rent. During the foreclosure process, you can negotiate with your lender for a deed in lieu of foreclosure. This will keep the foreclosure off you credit. If you default on a home or car loan, you're still responsible for the balance of the loan, less whatever the property was sold for, plus attorney and other fees. If the lender writes that owed amount off, you're responsible for income taxes on that amount. If a lender gets a judgement against you for the remainder of the balance, you can still negotiate with them to get a lower payoff amount, meanwhile, they can garnish part of your paycheck to satisfy that judgement.

Before I go any further, I want to state that I do not believe that living on credit is any good way to live. We have to finance certain large purchases like motor vehicles and homes, we should not be financing a lifestyle, groceries, or utility bills. However, if you are constantly paying late fees to creditors or utility companies, then a credit card may be beneficial.

Using the following information can be helpful or harmful financially, and is a dangerous financial game. If you're having trouble getting caught up on bills, you may want to consider getting a credit card. There are banks that issue cards even to those with poor credit, the interest rate will be higher, and the credit limit may be lower, but using a credit card responsibly will eventually help built your credit score.

On to the danger... If you have a Discover card, you can pay (depending on your limit) all or most of your monthly expenses with the credit card, and while most credit cards offer some type of cash advance, Discover also offers Cash Over. With Cash Over, you can get cash back at certain retailers ($120 per day/ no monthly limit), and the cash back is treated just like a purchase. Most banks charge a fee in the form of a percentage of the cash advance and also charge a higher interest rate on that cash advance. With Discover Cash Over, there are no additional fees. This is not some type of loophole or underhanded deal against Discover, it's actually a service they offer. By using the Cash Over, you can get enough cash back to pay at least the minimum payment (depending on your credit limit and minimum payment due). This is a very dangerous financial game, but if you need to get out from underneath the weight of constantly paying your bills late, this can help.

Currently, Discover is offering a 0% interest card for 14 months. If you charge a month's expenses to this card, and get cash from one of the approved grocery or drug stores, you can use that cash to pay the credit card. Essentially, you have a 14 month, zero interest, zero payment loan. For example, you pay $1000 of your monthly expenses with the card, when you get your statement, go to one of the retailers and buy something you need (milk, bread, eggs), get $60 cash back. Put that $60 in your bank and pay $60 on your card. ($60 seems to be the transaction limit, but you can do that twice a day if need be). You can do that for 14 months before you're charged a penny in interest, and no increase in the balance other than the purchase, however, you should be implementing your money making and money saving plans to get that paid off sooner.

Show Me The Money: If you use the link below, and you're approved for a Discover card, you will eventually receive a $50 bonus after your first purchase. You must turn off your adblocker for this to work (they will not bombard you with ads but adblockers seem to disable the tracking function). Discover link. If you don't get your $50, don't fuss at me, either you have a privacy setting that prevented Discover from tracking you, you're not in the first 10 people to take the offer, or Discover made a mistake. I will replace the link with a new one once I'm sure ten people have used it.

List of Cash Over retailers.

If you're not approved for a Discover card, NerdWallet may help in getting a card. You give them personal information and they'll run a soft check on your credit history (soft checks don't hurt your credit), and show you pre-approved credit card offers for which you'll likely be approved. I have no affiliation with Nerd Wallet.

If you're denied credit, you can get a free credit report and start fixing what's making your credit score low. It is beyond the scope of this post to discuss credit repair and there are several online forums where you can read all about it.

A credit card is not your financial savior, it's a band aid until you can heal your financial wounds. The forbearance method is your safest method of getting a small break, the credit card method will likely hurt your credit if you have a high balance to credit limit ratio, getting a second credit card and not using it will help with the balance to limit ratio, and you can keep the second card in your bug-out bag for emergencies.

I am not a financial adviser and I imagine financial advisers will probably cringe reading this, so take the advice with a grain of salt.

Now that you've cut your spending and are making more money, start building your emergency cash fund. $200 for gas will get you quite some distance if you're evacuating for a storm, $200 is also a good amount of cash to have on hand if you hunker down and local stores aren't taking credit or debit cards. If you're evacuating for a storm, expect to pay a couple of hundred dollars a day for a hotel, though hotels will still accept credit and debit cards. After you get your feet on solid financial ground, build up your emergency cash fund, then start on an emergency bank fund to cover costs such as replacing a refrigerator or freezer, or making needed repairs to your motor vehicle. For that 1% of disasters that money can't help you, stock up on beans and bullets and start building that fort.

What do you do to save money, make extra money, or otherwise make your financial ends meet?

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