Financial planning - Cover as much as you can

This post will have different meaning to different people. Depending on what you already have or where you are at in life. Some of us might have a lot of money, some of us might not have any. Most of us are somewhere in between. When we talk about preparedness remember we are not talking about one subject here. We are not focused on the Zombie apocalypse or a meteor slamming into the planet. We are talking about covering your bases and making sure you and yours make it through whatever life throws at you! While we can talk about making fire, sawing through cement with dental floss and ajax, this has little use for most of us! Most of us are going to be faced with the loss of a job, broke down car, sick dog, localized natural disaster or an accident which puts us in a situation we need to make it through.

When we think about financial considerations and emergency preparedness we need to stick to "Keep It Simple Stupid". there is no way most of us can go out and buy everything we would need. Instead we need to focus on what we can do with what we got. All of us can improve our situation with whatever resources we have access to. Focus and self discipline are needed here to do this. Instead of buying a new pair of shoes or a third keg of beer put the resources you would use for these things towards your planning. In a simplistic model we need the following things;

Cash - to purchase what we need
Consumables - to keep from having to use the cash
Shelter - to store our cash, consumables and to keep us out of the elements

We need to make sure we have enough of each of these things. What is enough? Depends on where you are in your planning. For most of us having enough cash to pay our bills at the end of the week is all we have. If this is the case we need to work toward saving enough to pay our bills for a week even if the check does not come in as planned for some reason. Ideally we need to cut or spending down and live within our means! There is a strange sense of freedom when you have paid your bills off and owe no one! For this post let's say we save enough to cover our bills for a week.

Once we have money for week and have become used to saving, we can focus some of these resources toward the next item. Having the latest night vision/thermal/x-ray vision scope means nothing if you can not wipe your back side! Take the money you are saving by living within your means and focus this on buying extra amounts of things you use every week. Be it pasta, toothpaste, toilet paper or laundry soap. Focus toward having a weeks worth of these items in the home. Some of these might be simple, buying a large pack of toilet paper takes care of that item for a week... hopefully! Buy what you use and give yourself the cushion of a week's worth. This might get done faster than you think!

When you have a week's worth of items focus the resources toward providing cover or shelter for your family for a week. How much is your rent or mortgage payment for a week? Set aside this amount separate from the money you have set aside under the cash category. (yes the money can be in the same bank account! One earning you interest hopefully!) Once you have weeks worth of rent set aside you also have an emergency shelter fund if your family had to leave! The amount of a hotel room is hopefully less than what you pay for a weeks rent and now you have the money to afford a hotel room if you had to.

Now that weeks have passed with you focusing your resources, not spending needlessly and saving everywhere you can...... go out to eat or watch a movie or something your family enjoys! Do not go all crazy and spend everything you have saved!!! Just make sure you go out and do something to celebrate your accomplishment. You now have enough to help your family for week and odds are they, along with you, had to change spending habits to make this happen.

After the celebration start the process over again. Save cash to now give you two weeks. Buy consumables for two weeks. Save money to pay for shelter for two weeks.

Repeat this process until you have a month's worth of resources. Just think of all the issues you could deal with if you had a month's worth of money, food and rent! Once you have a months worth keep utilizing your resources to better your position. Put money away in a savings account, let it start making money you do not need to work for.

Of course there is more to making your money work for instead of you working just to make money. The subject is to much to cover here on this post. The point here being to utilize your financial resources to better your family's ability to deal with emergencies which will come up in life. Remember the new dress or UFC fight you do not buy gives you resources which you can utilize for other purposes.

As Always,

Stay Safe.