Sunday, January 5, 2014

Preparing for an Uncertain Future

It is so easy to plan for the future when we have a clear picture of what lies ahead. I've found that I always have an easier time saving money when I know what it's for. When I don't know what exactly I'm saving for, it makes it a little too easy to spend money on non-essentials.

Of course, nothing is ever set in stone. I bought my house a year later than I was planning because the car gave up the ghost and I used part of my down payment money to buy another. I'm still waiting on a couple repairs on the house because...life happened. We rarely see the lay-offs coming, or the recessions (or we underestimate them), or the illness, or the death in the family, or the fire...However, these are the situations that we need to prepare for, even while hoping they don't happen.

First, as you've read in every personal finance book everywhere, build up an emergency fund. When you hit a bump in the road, it helps to have something to fall back on. Even if you can only build a modest balance, it can help you overcome the unexpected, such as an illness that leads to a tiny pay check. Keep the money in a savings account so you can easily access it and it isn't at high-risk of being lost.

Keep food in the house. I'm always surprised at how many people have to shop for groceries every week because they only have enough food for that week's meals. It makes sense to have at least a modest stockpile of food. Winter storms can make it dangerous to drive to town, or even a couple of miles to the grocery store. If you get sick, it is comforting to have food at home so you don't have to get dressed and drive to the store. In case of job loss, a stocked pantry can be a life saver, giving you the comfort of knowing you can feed your family while you continue to look for a job.

Learn new skills that are of multiple benefits. Gardening is a fun and relaxing hobby, but it can also supply food in times of crisis. If you lost your job, you could use your gardening skills to bring in a little extra money by tending garden for people on vacation or older people. Cooking from scratch is enjoyable, allows for maximum variety, is usually healthier, and can save you a load of money. Foraging is fun, but can provide medicine and food in both times of plenty and of need.

Hone your frugal skills before you need them. If you suddenly find that you must be frugal, you can not only feel frustrated but overwhelmed. Practice frugal tactics before a financial crisis so you can easily amp up your frugal practices when needed. Learn to cook from scratch. Learn how to darn socks and do basic clothing repair. Learn basic car maintenance.

Take the occasional No-Spend Challenge. You go for a set amount of time without spending money, whether for a weekend or a month. You save the money you would have spent. You also learn so much. You learn how to make pizza at home, how to substitute ingredients in recipes. You experiment with new coffee flavors by adding spices from the spice rack. You learn that you're spouse is awesome at Scrabble (or terrible). You learn how much you love taking walks around the neighborhood or find that you really enjoy biking to work. Most importantly, you learn that you can survive without spending money. Over the next few months, you find that you don't spend as much, because you know how to have fun without spending money. If a time comes when you lose a job, or you have a massive medical bill that requires a large chunk of your income, you can easily go back to your spending-free or reduced-spending ways to make it through.

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1 comment:

  1. Living where I do having a bit of a stockpile just makes sense. It makes a person plan ahead and like you it amazes me that I have friends that go shopping almost every second day for some type of staple that I always have handy.

    God bless.

    ReplyDelete

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