How to Prep when in Debt

goudThe other day I was consulting with a client when the topic came up of building up prepping supplies while trying to pay off debt.

As you know, I am a firm believer of not being dependent on any type of institution and that includes banks.  Living debt free is a huge part of being a self reliant.  When you don’t have a mortgage, car payment or credit cards that require a chunk of your income then you can put that much more money towards savings and investing in supplies.  How though, do you do this when you are in debt and trying to get out of debt?

First you need to make a road map, aka a budget, wait, don’t go away, the word budget is not a bad word.  Think of it like this, if you were going to take a trip from Maine to Florida and just got in the car and started driving you may end up in Florida eventually after getting lost a couple of times.  Once there you decide to look at the map to see how to get from Maine to Florida…that is doing it wrong.

Most people do the same thing with their money.  They spend it then look back at what it was spent on.  Most people just plan do it wrong.  Instead, just as  you would route out your road trip ahead of time by looking at the map, the same holds true for getting out of debt and prepping all at the same time.

Lay out a plan, a budget.  Take a sheet of paper or do it on the computer, first add up how much you bring in each month in income.  Next, write down on each line the item that requires a payment, dollars that leave the household each month, don’t forget annual things like car tags, property tax, insurance etc. (for those items take the annual amount and divide by 12, that number is your line item number for the month)

Line items examples:

Mortgage
Food
Electricity
Water
Phone
Internet
Cable
Car
Eating out
Alcohol (huge savings if you don’t drink)
Cigarettes (save money and your health and quit smoking)
Credit cards (if you have to charge you can’t afford it anyway so don’t buy it if you don’t have cash, I digress)

Chances are if you are like most people, your income is less than your outgo.  First thing you need to do is increase your income.  Getting out of debt isn’t easy, it will take work, hard work especially for the next couple of years.  Get a second or third job.  Deliver pizza (extra $800/mo) sling boxes at UPS, FedEx, DHL, night work, pays well, mow lawns with a landscapers on the weekend.  .  Be creative, bring in extra money!

Next pay down your lowest credit cards first. Once the lowest is paid down, take the amount of money you were making on the lowest card and place it on top of the min payment for the next card and so on.  Many know this as the debt snowball, if that sounds like Dave Ramsey, it is.  Read The Total Money Makeover what is says really works!!

This process will help you get your debt paid down, but what about prepping in the process?  This is where being true to yourself comes in.  Instead of eating out (a line item that most over spend on) eat at home and put the eating out money toward prepping supplies.

When you go grocery shopping, focus on buy one get one free items, providing it is something you and your family will eat.  Instead of buying one can of soap, buy two, same with veggies, fruit, etc.  A little bit at a time your food supply will grow.  This is where buy one get one free comes in great.

Sacrifice and prepare for a disaster, which could be a job loss or natural disaster,  by quitting smoking and drinking.  That’s right, it will be healthier for you in the long run, plus when a disaster happens, it will be difficult or too expensive to get cigarettes and alcohol anyway, might as well ween off now so you are not dependent on stimulants, that is a huge dollar savings each month that you can put towards prepping supplies.

One thing I have found through the years is that if someone is serious about prepping, they will adjust their lifestyle to be able to afford to prep.  Same for those in debt, if you are serious about getting out of debt you will do whatever it takes to do so.    I know, I was once in debt with credit cards, house and car payments and now live totally debt free, no credit cards, paid off cars and paid off home mortgage.  I am self-reliant and hold no debt to anyone on this earth.

If I can do it…so can you!