Monday, July 14, 2014

Back-To-Basics Financial Reserve

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The last focus for the big three of the Back-To-Basics series (1. Water, 2. Food click on the back-to-basics tab above for all the back-to-basics posts)  is Money.  Not necessarily the easiest topic, but here we go.

We all use money, everyday.  Our lives depend on how much is coming in and going out.  Why do we need it in our food storage?
  • money is needed to buy your storage
  • money is needed in times of stress such as: job loss, extended sickness, bread earner in college, economic distress
  • small amounts of bills will be needed if there is ever an emergency that knocks out power.  No ATMs will work and neither will credit card machines.  
Today we live in a society of thinking that we can just go buy a new one, of almost anything.  We need to retrain the way we think, and hold onto what we have for a little longer.  Sew clothes instead of getting new ones, hold onto our cars for a few years longer, learn to cook from scratch and not buy convenience foods, make do with what we have.  So many of us are not prepared for "a rainy day".  We haven't saved up a reserve of money to help us through a tough time. And the rainy days that I am talking about are not zombie apocalypses.  The fridge, washer, dryer, car, house, they all seem to have a problem, and at the most inconvenient time!  Kids need money for school, soccer, football, tennis, new shoes, birthday presents for friends, doctor/hospital visits.  The list could go on forever.  A serious illness or extended hospital stay can devastate a family financially. Having money set aside for these events will give you peace of mind because you won't go into financial ruin to pay for them.

I know it's difficult to just get by every month, but lets look at a few ways to start saving money:

  • Pay yourself first every month.  No matter how little it may be, take out money for yourself and put it in a savings account.  It may seem difficult at first, but it will become habit.  
  • Don't use credit cards, unless you pay them off every month.  
  • Don't try to get out of debt while still going into debt.  You can't get out it if you are still buying the latest and greatest thing.  Hold off on those impulse purchases!
  • Save a few dollars every month and put it in your 72-hour kits.  If you only have large bills, a bottle of water may cost you $20 in an emergency when there isn't any electricity for credit/debit cards.
  •  Live within your means.  Don't watch your friends and neighbors and try to keep up.  This one is really hard, but you have to remember the long-term goal of having money set aside.  And most of those people with fun toys are probably in debt to pay for them.  Don't get caught up in the hype!
  • Having food storage will always pay off in a situation where  money is tight.  Cutting the food budget is the first thing you can do.  If you have food storage you can do that!  Learn to cook from scratch and always have basic food ingredients on hand. 
  • Discipline! You have to exercise control when spending!
  • Make and stick to a budget.  Writing things down makes a huge difference rather than thinking you know how much you spent.  There are a TON of apps you can have on a phone or tablet to keep track of your budget.  I find it really convenient and it's so easy to pull up and look at what I have spent.
  • Speaking of it a necessity?  Think about a cheaper phone, or phone plan.  Do all of your children need a phone?  This goes for tv's, satellite plans, insurance plans, there always seems to be a better deal, and switching companies can save you money.  There are also so many ways to watch tv and movies, whether it's online, or renting, there are ways to cut back the costs. 
  • Wants vs. realistic on what your wants are.
  • Become financially independent over time, gradually.  Just as with food storage, this is a process and not a one time event.  Be patient with yourself and save a little at a time.  It will add up.

These are just a few ideas of what you can do to save money for a rainy day fund.  It takes time and patience to accomplish. Get your whole family involved in saving money.  Teach your children about money, working, and budgets.  Keeping the communication open about money will alleviate the stress level for children.  They know when we are stressed, talking about it will help them feel safe.  It is really difficult, and expensive,  to raise children, but communicating with your children will teach them valuable life lessons when it comes to money and hard work.  Dealing with money is HARD, and we ALL stress about it, but make saving money a goal and commit to that goal.  Be ready for that rainy day!

Here is a link to view the pamphlet from the LDS church on having a financial reserve.

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