Home Economics: Smart Spending = Preparedness

Here is a great article that talks about Budgeting for preppers.

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I want to talk about this more in-depth. I know many of you have already done this or already are doing this, but many are not, or have thought about it and have not!

I was a bad spender, bad prepper and overall just a person who didn’t have his financial SH (you can figure the rest) together.  I didn’t spend more than i had normally but often I was left was a nice balance of $0.0 at the end of the month.  This is fine if you never plan on retiring or having preps!

The first thing anyone who is getting into the preparedness mindset/lifestyle should do, and even if you’re not, Is get your financial house in order.

Budgeting

Sit down, and gather your bank statements, credit card bills, utility bills, etc from the last few months.

Get out a notepad and write down Expenses in one column and Income in another.

EXPENSES

  • Itemized Utilities (Water, Electric, Sewage, Trash, Phone, Cable, Internet, etc.)
  • Cell phone
  • Food
  • Gas
  • Itemized Insurance (Auto, Home/renters, Life, Medical, etc.) To get this just go over the 6 month/yearly bill and divide by 12 or 6, etc.
  • Clothing
  • Entertainment (Movies/Rentals, Eating out/Order In, Bars/going out, Dates, Books, Pay per View, etc.)
  • Alcohol/Tobacco
  • Kids Food/Clothing
  • Etc.

INCOME

  • Full Time Income
  • Social Security
  • VA Compensation/Education
  • Part Time/Secondary Income
  • etc.

Now these are just generalities, not a full list everyone’s list will look different but think of EVERYTHING you spend money on, look at every expense and mark it down.  Something Like Post it’s and pens could be in Office supply category if you buy them often, 409 and Windex could be cleaning, smaller things that you don’t usually buy can be put in expenses.

The farther back you look the better picture you can get, this is also a good reason to SAVE every receipt!  I save every receipt possible, a few may get lost or thrown out here and there, but about 99.9% are in a Folder marked by each month, then scanned and filed in a computer folder month by month.  I have probably everything I’ve bought marked down since 2008.  If you purchase it on the net, have a separate folder(s) for those, print them out and file them hard copy as well.

The reason for receipts is that you can better see your expenses, hold yourself accountable and also if you are ever audited by the IRS you will need them.  IRS audits mostly are concerning write offs and deductions, so definitely keep ALL OF those, and you need to go back 7 years for those.

Once you get your numbers together you can get a better picture of your finances, where your money is going and where you can cut back.

SMART SPENDING AND CUTTING BACK

Ok now no matter whom you are or how much money you make you can find areas to cut back on, because even if you make 300k a year you will still only have so much to spend on your preps, and by cutting back you will have more.

These ideas for cutting back are all situational, but the general advice works the same.

Some areas to cut back on are pretty standard and easy such as not going out to eat twice a week, but perhaps once a month or not going out to bars as much, etc.

When I looked at how much i was spending ordering in, going out to eat and drinking at bars (I was 25 and contracting so i had the money) I was astounded, I figured because I was making 100+ a year (at the time, DEFINITELY NOT ANYMORE!) I could go out whenever i wanted and not worry about it.  I didn’t have to technically, but when i broke it down i realized I was an idiot.  It was a BIG chunk outside of living expenses.

So I cut back, I didn’t go out as much, I stopped going to bars as often and started to cash that money away.  I bought guns, silver, food preps and other things with that.

Looking at your utility bills see where you can cut back on those.  Some of the suggestion may sound “extreme”, you can choose to or not to, but they are ideas! and you can fit them to you and your family’s life.

WATER

  • You can take fewer showers per day, maybe 1 instead of 2.
  • You can perhaps speed up the process.  One way is called “Navy” Showers.  You get wet, turn off the shower.  Lather up and clean.  Turn it back on and wash off, turn it off and get out.
  • The old “If its yellow let it mellow, brown flush it down”  Don’t flush for pee, only #2
  • Hand wash dishes, and turn off the faucet between.
  • If you filter water Get a Berkey, over a 5 year period you will save hundreds of dollars vs. Brita or PUR and it filters more and is overall A higher quality filter.

ELECTRICITY

  • Turn off lights when not in a room
  • Don’t leave the T.V. on at all times.
  • If you are leaving lights on for security use a timer to shut them off and turn them on instead of leaving on all the time.
  • Use Surge Protectors for the T.V. area (where a DVD, Gaming system etc. is also located), Office (where computers, screens, speakers, etc) and when you are done and shut them off hit the surge protector as well so it doesn’t continue to draw power even when they are “off”
  • Unplug EVERYTHING if you are going to be gone for days, many things such as your oven and microwave, etc continue to draw power when “off”
  • Set the Thermostat lower if you have electric heat, or perhaps invest in a good wood stove to complement it.

HEAT/AC

  • If cost effective and you own the home look into replacing windows with double/triple pane.  If not cover unused rooms windows in bubble wrap as I describe in the post a few days ago.
  • Buy door draft blocker, or just roll a towel up and tape the ends to keep it from unrolling.  This will keep the cold air out and hot air in, or vice versa depending on your climate.
  • Use towels again to block any drafts coming in your windows.
  • Keep doors to unused, or rarely used rooms shut, they will be slightly cooler or warmer depending on the climate but will reduce the need for your heat/AC to kick on
  • If you live in a warm climate, consider a cheap swamp cooler for the garage instead of A/C.  They can work in the house as well, BUT they do introduce a lot of moisture into the air which can cause mold and mildew.

CELL PHONE

  • Look at your plan and see what you can get rid of
  • Can you downgrade a portion of your plan? Do you need unlimited texts? Could you live with just calling or emailing?
  • Can you eliminate data? do you really need to get on the net on your lunch break or post on Facebook constantly?
  • Could you get by with just a “basic” phone?  Smartphones often carry a $25 a month fee on top of the existing plan!
  • Could you just have 1 Basic cell phone for emergencies and a cheaper land line in your house instead?
  • Look at Companies like NET 10, TRACFONE or AT&T “Go Phone”.  Many of these can cost significantly less if you are smart about your use and have no contracts.  Many of these start out at around $20-$40.  You can even get smart phones like the HTC EVO for around $150 and then pay just $50 a month.  Overall you save a lot more money than sticking with contracted companies, but it has more upfront cost.

CABLE/SATELLITE/INTERNET

  • Do you need more than a basic package?
  • Could you get by without having more than local channels?
  • Look into competitors to your current company.  Call them up and ask them…”Currently I am using X cable company and i get [this and this] for [this price], what can you offer me that’s better? Can you give me a better deal to switch to you?”
  • If you can get a deal offer from a competitor get that person’s name and the details of the offer.  Then call up your company, tell them you talked to X competitor company and they are willing to offer you X package for Y price.  Tell them you want to stick with them because you appreciate their service thus far, etc.  Then ask them to match it or to see what deal they can make for you.  In the world of cell phones and cable, it is MUCH more expensive to find a new customer than to keep an old one, so if they are smart they will offer you something to keep you on-board.  If they don’t take the other offer.  You can also just call them up and tell them you are looking for new service at a lower price so you have been calling other competitors, don’t say who or what they offered you.  You can just ask them to make you an offer, a “Why should I stick with you” conversation, see if they are willing to give you a month off, or $20 off your bill a month for six months.
  • Smaller companies can give you good deals as well, so if they are in your area don’t ignore them.
  • If you have it, do you need a DVR? could you just catch the show(s) you like when they rerun?
  • Could you just BUY a DVR like TiVO off the internet and have a one-time cost instead of a monthly add on? Would that work out better financially?
  • Do you need that high of a speed of Internet?
  • Call your company ask if they have any deals going on right now for internet? See if you can switch to a higher speed for a certain time? Often they will have an “Upgrade to the Fast as a roadrunner package for nothing for 30 days, etc.” Switch and set an alarm on your phone or put it on your calendar/whiteboard whatever to call and cancel.  This doesn’t save you money BUT does give you something “more” for “nothing” for a short period.

Rental/Mortgage

  • I am not a specialist or expert in the field of mortgages and home loans so take this with a grain of salt
  • Check to see if you can refinance you home mortgage if you have been in the home for a while and/or the value of your home has dropped significantly.  Refinancing incurs additional charges so make sure the benefits outweigh the cost
  • If you are renting and planning on staying in that city/town/area for the near future 10 years+ can you afford to buy a home? Could you afford a mortgage?  Rates are so low right now, and home prices are still down in most areas so it’s about the best time to buy in recent memory.
  • If you don’t have good credit start working on that, consult a free credit counselor like the National Foundation for Credit Counseling, they are non-profit and offer free or low cost credit counseling.  The way upped my credit from 300 to 788 was to take out small personal loans (around 1000) and pay them off over a year.  This COST me money in interest but is started to show a credit history of payments over time.  I also got some credit cards AND INTELLIGENTLY used them for only GAS and part of my food bill.  I then would pay about 3/4 of it off and then roll it over.  I only had a $500 limit, called and set it at that SO I COULD MAKE SURE I DIDN’T DO ANYTHING STUPID.  This was AFTER I made my first mistake with owning a credit card, which if you read the About Me section on the site you’ll know more.  I then would make sure I never spent more than I had in the bank, and I kept enough constantly in my bank to pay if off all at once if I had to (on top of the other money I needed to pay monthly expenses, etc.).  I then kept paying over minimum of course but under full payment, so that it showed that i could pay monthly on debt, month after month after month.  This is what I did, and is by no means a foolproof plan, but that’s my experience so I’m sharing it with you. NEVER UNDERESTIMATE THE ALLURE OF A CREDIT CARD TO SPEND BEYOND YOUR MEANS!
  • If you have some money socked away and can put that down for a down payment, go and see if you can at least get pre-approved for a loan, if you military look at the VA home loan that doesn’t require a down payment, however if you can make as large of a down payment as you can.  Lending agencies want to get more mortgages out there, but they are still skittish after 07/08 so if you do have money to put down that could mean a lot.
  • If you plan on continuing to rent, and have been a good renter, paid on time consistently, no problems with any complaints than you are probably a landlords dream.  If they are not a corporation like Weidner, etc. and are an individual renting out a few properties, see if you can finagle a better deal.
  • Ask if perhaps cable or internet could be included with the rent?  See if they can reduce the rent from say 1000 to 950, if you have the money available, offer to pay X months in advance to show good faith, etc.
  • See if you can take over some of the maintenance duties for them, i.e. cutting the grass, shoveling the snow, misc. duties.  So that either “they” don’t have to do it, or “They” don’t have to hire someone else to.  If you are in a winter climate, ask how much they are charged per month or per snowfall, etc. to have someone clear the driveway and sidewalk areas, ask how much it costs them to hire someone to upkeep the yard, etc.  If they are willing to tell you tell them you will do it for half that, 3/4 that, etc., and just to take it off the rent each month.  Tell them you’ll do it for “free” for a month or two, if they like the job you do, and then they prorate you those months against your rent, etc.
  • See if it’s possible to “downgrade” to a similar apartment in a similar area for less money or to a smaller one.
  • Look into storage units if you are downgrading.  You could possibly move from a 2 bedroom to a 1 or a studio and save 350 a month, while only spending 75 to store your stuff in an storage unit, a net savings of 275 overall.  This storage space can also be used to hold your preps (which if you read 299 days, “Grant” did the same to keep his prepping from his wife!)

GAS/VEHICLE

  • Look into getting a cheaper more fuel efficient car for working and commuting.  I understand if you don’t want to give up the suburban or van for bug out uses.  But look and see if the cost savings over getting a 2000 civic vs continuing to use the gas hog for commuting will save your money over the life of the vehicles.
  • Look into riding the bus, see if that will overall save you money vs. time.  This doesn’t mean give up your car, just using it more sparingly.  Lower mileage use also equals LOWER INSURANCE PREMIUMS!
  • Look into getting a large Fuel Tank at your home, this way you can buy half a year’s use of gas in one fell swoop when the price is lower.  There are winter and Summer Grade Gasoline’s.  Summer grades have slightly more “energy” thus more fuel efficiency, while winter grades are cheaper.  You can make your own decision.
  • If you don’t want to get a large fuel tank, try buying some gas cans or getting them cheap.  Store them safely and securely as they are explosive and a fire hazard as well as a very valuable commodity and do get stolen (some a-holes stole a car with a few gallons in it right out of my driveway, which I stupidly left next to the truck!).
  • You can find gas cans for cheap or free off of craigslist or others, but nozzles (the old ones, which are the best) might run you a little bit of money.  If you have reward fuel points at some grocery store then fill up your car and use the remaining gas allowed to be pumped to pump into gas cans in your car (usually a $100 or specific gallon limit, depends on location).  This can mean .10, .20, .90 cents off a gallon and over time you can store a lot at this cheaper price! Fill up as needed over time out of the storage as needed.  And it’s always good as a prepper to have Gasoline stored, you never know.  Rotate the gasoline out, First in First out, so it doesn’t go bad and cause some issues with your engine, if you want to store it longer term look into getting STABIL, fuel stabilizer.  Normally your gas should be used seasonally, say if you fill in the spring use by Christmas.  With STABIL you can get 1-1.5 years out of it, and with PRI-G you can get 5+.
  • I know it’s a pain, but just learning how to change your own oil can save you money as well, and it’s not that bad.  Constantly check your vehicle, keep all the fluids topped off at appropriate levels, check you belts, etc.  Keep on top of regular maintenance and you WILL save money.  If you have issues with the car, take it in, or find a friend who knows about cars and have them look at it.  Letting that “Tick” run for six months, years can be fine and “Save” you money at the moment, but what could have been a $75 repair cost now will cost you hundreds, etc.  Find a GOOD, HONEST mechanic and stick with them.

ENTERTAINMENT

  • Now I won’t be a Teetotaller and tell you no more going out, however of all your bills, this is pretty much the easiest and most obvious cut
  • Eating out is on average much more expensive than dining in, however this can vary from place to place, of course if you buy quality fruits and vegetables, meats, etc. It might be a tad more expensive than a salad at the local gas station/mini mart.  This is of course not an apple to apples comparison.
  • Try to limit yourself to a small budget every month for “entertainment” say enough to go to a dinner and a movie only once or twice a month, if you have been eating out 2-3 times a week, even fast food, you will see an immediate result in your pocket book…..and waist line.
  • If you rent a lot of movies from Blockbuster or other video rental chain, this can COST a lot of money, given that they will charge 3.99 for a one night rental of a new release.  Get netflix for 8 bucks a month for an unlimited selection whenever you want.
  • Wait for new releases to come out on a REDBOX rental kiosk (if you live in/near a city/town) this can be a savings of 2.80 per rental!  Plus you can sign up for promo codes (i.e. coupons) to be sent to your email/phone and get .50 off per week.  Look for other promos on the Internet.
  • Go to the Library if you have them, often they have a great movie section, and its free!
  • Consider not watching movies constantly and just turning the T.V. off.  There is so much information out there, start reading books, find out about the history of this country, study economics, politics, gardening, etc.  Become informed.  And of course read the GNP blog constantly…just kidding. Or am I?
  • Look at getting into more “productive” things for entertainment, camping, hiking, hunting, fishing, learning new skills like sewing, crocheting, leather work, all things that can add to your preps as well as being fun for you and your family.

FOOD

  • Now this is something that I have had an issue with, in that I have started to try to move my family to a higher quality food intake.  Organic foods and items without high fructose corn syrup can and usually are more expensive.
  • Consider if your bill is tight to just switch a few items here and there to higher quality organic foods and start growing your own vegetables in a garden, even if it is just window sill beds.  Even just a few carrots here and there can help to teach you more as well as give you quality food to eat.
  • Shop at big box stores for your big items if you are able.  If the $100 annual membership gives you pause consider going in with other families.  One person will be the Shopper for the other families.  They can chip in for the membership and you can get their lists and buy for them as well.  Costco is higher quality but slightly higher in price than Sam’s club.  I prefer Costco.  We buy our big bags of rice and other canned goods there, as well as cheeses, meats, etc.
  • My wife being Gluten intolerant has given us a more limited array of food to choose from.  However shopping online helps immensely.  Thankfully many stores now offer Gluten free products…but they are MUCH more expensive.  However I found that where we had been spending 19.99 on a 4lb bag of Gluten free bread mix I was able to find a 25lb sack on Amazon for $68  A big savings, from paying $4.99lb to $2.72!!!
  • Don’t buy into the EXTREME COUPONING hype, it has been pretty much found out that these stores give big breaks for these shows and drastically oversell (no pun intended) the savings you can get.  That combined with the fact that these women have a full time job with a decent amount of overhead running around getting all of these handouts/newspapers to clip the coupons.  That being said if you want to do it, go for it as well as I save a lot by doing a bit of hunting for matching manufacturers coupons for the things we buy often and using them with/without store sales.  Take a little time to do it and you can save a little and put that into your preps, or buy stuff for your preps at a discounted price.
  • The choice to go for more organic or not is your choice, however I can’t implore you enough to at least do a little bit here and there.  It’s not hippie granola propaganda, trust me I am by no stretch of the word anything close to that.  However it’s not like going “vegan” where it’s a choice to NOT eat meat because of moral issues.  The Chemicals pumped into our food supply is NOT good, and if you take the time to look into it you will see the same thing.
  • The most important thing is to look at what you have been spending on food and see what that total number is for the month.  Then look at where you can save, through coupons, buying bulk, cutting out, etc.  Set that budget and stick to it.  Just “buying what I need” is not a plan.

Alcohol/Tobacco

  • I wouldn’t sit in judgment of anything you do, you want to drink do it, you want to smoke, do it.  It’s your life.  However as a prepper we want to maximize the survivability of ourselves and our families.
  • Tobaccos is horrible for your body, but if you must, then look into rolling your own cigarettes or switching to a cheaper brand.  If you have friends/family in a state like North Carolina has them bring them to you whenever they are in the area and come to visit.  Unfortunately The Prevent All Cigarette Trafficking (PACT) Act, which was signed by the President on March 31, 2010 which prohibits them mailing them too you.  This is so the market can’t operate freely and you just buy cigarettes elsewhere and opt out of crazy high taxes in places like NY.  Rolling your own tobacco can save you A LOT of money overall.  Of course the taste will be different, but you can also put away unrolled tobacco in your preps if stored properly.

EXTRA INCOME

  • Disclaimer for this section is first that any and ALL income must be declared to the IRS and your state in regards to income tax.
  • Consider starting a small part time business for yourself for just a few hours on the weekends or days of the week where you aren’t as busy, etc.
  • This could be things as simple as mowing lawns and weeding gardens/flower beds.  I have done this all my life (often I feel as though I haven’t advanced past being 14!), it does add a little to my pocket.  I can often get as much as $40 for an hour of work, I usually work by the job and not hourly, however it can depend on the client.
  • Another good one is pet services.  Put out ads on local community boards, craigslist, etc. offering to come and clean up their pets poop in their yard.  Look at local companies already doing this, off your service for less as well as a “First time is free” or “if you don’t like how my work, you don’t pay” to get your foot in the door.  I have done this as well and had a tiered rate depending on numbers of times a week as well as how many dogs/sizes.  My biggest job was $50 a week to come by three times and spend about 20 minutes there, so basically $50 an hour, and if you are smart about it and make your route efficient you can knock out 2,3,4 within an hour on the way home!
  • Look at re-selling books.  Now this can take a bit of homework and be time consuming for the return, its hit and miss for me.  Here’s a run-down on how I do it…….
  1. I get my books from 3 places.  Local Libraries.  They often have bins of “free books”, most of them are in tough shape and don’t sell AT ALL, however a few gems can be gleaned on occasion.  Local Universities.  Across the whole campus in their libraries and various buildings there are stacks of free and extremely cheap books!  Some of these don’t sell at all and some SELL BIG.  I found a stack there of about 20 textbooks and other books, that ended up giving me around $250 after months sitting on Amazon.  I also found a complete Encyclopedia set that I bought for $25 and sold for $320.  I also look through craigslist as well, as many people sell random books when they clean out an attic, etc.
  2. I use a smart phone and access Amazon there and check the ISBN number or book title and see what the lowest USED price is, if it’s over $5 I’ll go for it, anything less than that, I wont.  You also have to be careful I once bought a book for .25 because it said the lowest used price was $150…well that was because there was only one person selling it, and he wanted WAAAY more than it was worth, ended up dropping it down to about $35 before it sold.  Yes i made a big profit, but not as much as I thought, and other circumstances like that I still have the book sitting on amazon.
  3. Also be careful about Amazon, they have a weird system of what their “take” is, and I was once burned on a book because i listed it too low and ended up “paying” about $1.20 to send this book out….I could have canceled the order, but it was my fault so i took the hit.
  • Consider starting your own blog…yeah like me!….it may never be a money maker, but it could be.  The key is to find a niche (that’s a small piece of a larger puzzle, say instead of blogging or starting a website about cars, which has massive competition, a niche would be 1980′s Honda Sedans, you get what I mean).  You can over time through trial and error and education learn how to make money from them.  Although i don’t make a lot from this site yet, it’s pretty much paying for itself at this point, this is a passion project.  Yes I hope to one day make this a part time job with part time income, but it will always be a passion first.  I do have other sites out there, one on how to get security contractor jobs and one on a guide to play a popular game on Facebook.  I don’t make a lot but it ranges from 150-200 extra a month.
  • If you have any passions outside of prepping, whatever they might be, from model trains to bicycles look through craigslist postings, eBay, flea markets etc. for those items that you know a lot about.  You can make a small business based on buying and reselling these items.  Now i would have no idea what to look for, you do, use that knowledge to your financial benefit.

Conclusions

This post was in no way meant to be all encompassing, but just some ideas, hints, etc that I have learned over time and have experience with.

They main thing is to figure out WHAT YOU ARE SPENDING and how to cut back, to make a budget and incorporate your preps into this budget as well as saving for the future.

Via: greatnorthernprepper


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