7 Jan 2014
So many women are smart about planning their day, grocery list, doctor appointments and the like. It amazes me how many self-proclaimed self-sufficient women are financially drowning. You can’t successfully prepare to survive if your financial house is not prepared.
Let me start by saying going into debt to become self-reliant is not being self-reliant. Part of being self-reliant is to insure no one can come after your home, car or other assets. Living debt free is like a form of insurance. Remember the borrower is slave to the lender, Proverbs 22:7. Lenders will come after you till the very end.
The secret to successful self-reliance is to always pay with cash on hand. If you don’t have the cash to pay for it, you can’t afford it. If you have debt you won’t have enough cash to successfully save and invest in your future much less your today.
Live as frugally as possible, to the point that family and friends call you cheap (a term I now take as a complement). On top of living frugally, invest in products that you use on a daily basis, it will be cheaper to buy more now than buy something next year, have you seen the grocery prices lately?
Be sure you have at least six months of savings (meaning you could live at least six months with no other income) once you have that, stocking up on products should be divided between savings and purchases. Ideally, the best plan is to have at least one year of savings in place. That way you can financially survive a year with no income.
One secret to successful self-reliance is to buy extra food and products in bulk and at a discount. Another option I like is to have a second source of income and use that money only for extras. Either way, all purchases should be done with cash on hand and not with credit.
If you are in debt, the debt will only come back to haunt you. When the time comes for you to truly be self-reliant and you can’t keep up with your debt payments then you may be put in a position to have to sell your car and/or lose your home, you can’t be self-reliant without a car or a roof over your head.
Yes, that is right, when I say no debt I mean no debt including a house payment. Pay off your mortgage too. Remember the key to successful self-reliance is to eliminate the reasons for people to come after you, which includes the bank that holds your mortgage.
Look back at history, the Great Depression. Bank failures snowballed as desperate bankers called in loans which the borrowers did not have the money to repay. If you didn’t own your farm or house you could have lost it if the bank called in the note out of desperation. Could this happen again? It is possible, in a poor economy anything could happen.
The bottom line is to avoid debt, pay off the debt you currently have. That is one secret to successful self-reliance.