Why personal finance is critical for preppers and tips on money management
Personal financial planning is an important but often-overlooked step for preppers. With these easy tips, anyone can improve their money situation and be better prepared for emergencies.[See the full post at: Why personal finance is critical for preppers and tips on money management]
Bee Liberty - August 12, 2018
What about precious metals as a hedge? Surely a few gold and silver coins is a good idea? Be wise, be insured, be prepared. I think so anyway.
John RameyStaff - August 13, 2018
Slightly touched on this in the emergency fund section, and will write a separate guide for precious metals. Yes, precious metals are a good hedge and have a place in a prepper’s portfolio. Personally, I keep about 3% of my net worth in metals, mostly in 1 and 10 oz gold pieces. I consider that to be part of my liquid emergency fund (at least 6 months worth of expenses), rather than being a separate allocation on top of the e-fund — too many preppers have gone too gold crazy in the past, resulting in too high of a % of their portfolio.
Jonnie PekelnyContributor - February 23, 2019
You give a lot of good advice here. The problem is — what if you’re already low income and not quite making ends meet? I’m in my early 50s. I never was very successful at saving, unfortunately, but 10 years ago I developed a disability that made it impossible to continue with my career. So now I live on SSDI income in one of the most expensive areas of the country (and the world, for that matter). I do own my own house, but that’s pretty much my only savings asset. I have lots of medical expenses and a considerable number of other expenses. I never seem to fit into my budget. For the past 10 years I’ve been living off of some money I took out of my house but now that’s starting to really peter out. I think I have $7K left. When I run out I guess my life will have to take a fairly drastic turn? I don’t know. The whole thing is upsetting and scary to think about, so it’s been hard to sit down with any kind of budget.
John RameyStaff - February 25, 2019
Sorry to hear that brother. It goes without saying the medical system in the US is screwed up.
In addition to being strict about following a budget so that you can live within your means and working on ways to increase your means (maybe local/state programs to supplement your SSDI income, finding a side-hustle you can do online, etc.), use the time you have to learn skills that will help you be frugal later. Cooking, sewing, basic handyman/repair work, and so on.
cmk - March 7, 2019
I’m sorry about your situation. I’m lucky that my health is good and my job is secure now, but after my divorce I was in really deep. It made me sick to even think about my financial situation. And ashamed. It helped to get every single debt, assest, income, and expense into a budget. I cried for about two days to see it all in black and red, but it wouldn’t have gotten better if I didn’t start there. In my area of Iowa we have Horizons, it’s a community service organization that has financial counseling as one of their services. It’s free and was really helpful. Maybe there’s something like that in your area? Now that I’m digging out I can see that some of it was bad decisions, but most of it was just situational. I don’t feel ashamed anymore. I wish you the very best of luck.
Uhlan - July 3, 2020
That should be required reading before anyone is allowed near the gear stuff.
Coaster - August 31, 2020
A great starting point is to take a look at the flow chart in this Reddit post: https://www.reddit.com/r/personalfinance/comments/4gdlu9/how_to_prioritize_spending_your_money_a_flowchart/
It gives simple easy to follow steps to get you on the right track financially.
Ef Rodriguez - August 31, 2020
I love a good flow chart. This one’s very straightforward. Thank you!
Are there any other finance-related subreddits you would recommend?
Coaster - August 31, 2020
I found the chart at the tail end of paying off my debts and moving into saving more. Every time I do more research on what I should be doing to invest I come back to the chart and it is right. This leaves all the investing subreddits as not very useful to me since buy and hold low overhead mutual funds is not a hard strategy.
For budgeting I would recommend a look at Aspire Budgeting. https://www.aspirebudget.com/ It is a free Google Sheet that is under active development. Getting started is a little bit of a hurdle however if you watch their Youetube videos it’s pretty simple after that.
If you are struggling or have lots of free time reddit.com/r/Beermoney is great at giving insight on which survey and micro task sites are worth it. Trying to live off it would drive you insane but earning an extra $50-$100 a month isn’t hard.
Another service I found helpful was Wealthfront https://www.wealthfront.com/c/affiliates/invited/AFFD-UCFE-2GYD-A4KX I had a collection of 401Ks from old jobs that were hard to manage and underperforming. Rolling them all into one place that is easy to manage has helped. Their Cash Accounts also pay way more interest than your banks savings account probably does to stash your emergency fund.
Lowell - September 21, 2021
I’ve recently stumbled upon “FIRE / Boglehead” stuff, and it seems very relevant to this article, but I don’t see lots of the principles from that stuff mentioned here.
For example, I just started this video series which so far has taught me about stuff I had no idea about but seems very useful to know, like Annuities or Treasury Inflation-Protected Securities. There’s also stuff like “the 4% rule” that seems super relevant.
Retirement planning seems super crucial to preparedness, because it’s something that happens to basically everyone. (At some point, you won’t be able to work, and you may want to stop working even before that.)
Is that stuff explicitly excluded here? Or am I just missing it?
John RameyStaff - September 22, 2021
FWIW, I’ve been a Boglehead since the mid 2000’s and into FIRE / a member of those subreddits since they started. There’s a lot of overlap between the communities, for sure.
We did link to Bogleheads and some of the ‘starter’ subreddits at the bottom of this article, but otherwise it was intentional to not get into things like Safe Withdrawal Rates or TIPS. Saving for rainy days and retirement, absolutely, but not necessarily in the spirit of retiring early.
This was more of a basic article for people who don’t even think of finance as part of preparedness + cover some of the basic principles. Although there’s a lot of overlap in communities, the goal of retiring early seemed separate enough to not include in this basic guide. But if there’s community interest, there certainly could be a more advanced page for these things. (You can get it started!)
There are clearly overlaps in the venn diagram, though. For example, I have never used the 4% rule in my personal math because of the same pessimism for the future that drives my prepping. I use 3-3.25% instead, to reflect degrowth / lower growth rates as the problems of late-stage capitalism become more serious.
Gideon ParkerStaff - November 1, 2021
Very glad to hear that you enjoyed the article, it is one of my favorites. You are observant in seeing the correlation between the two articles.
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