A Visit by the Reverse Prize Patrol

I just love the Publisher's Clearinghouse Prize Patrol. I never get those sweepstakes entries in the mail, and if I did, I probably wouldn't fill them out. Still, I like to imagine that one day the doorbell will ring and some man will shove flowers and a check for a million dollars into my arms.

I have, however, been visited by the reverse prize patrol. What's that, you ask? The reverse prize patrol is when the doorbell rings and you find a large bill. Surprise! You owe $500.

Yep, that happened to me this week. I thought the doorbell was the UPS man when it actually was our propane delivery driver.

A 500 gallon propane tank is expensive to fill
Image from missiongas.com

Our conversation went something like this:

Me: "Gee, I thought we just sent you guys a huge check to pre-pay for our propane through April?"

Him: "Well, ma'am, that just covers you from September through April. We top off your tank before then.

Me: "......."

Him: "Ma'am, are you OK? You look a little pale and your jaw seems to be on the ground..."

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Crud. August was a tight month for us and I definitely didn't have an extra $500 just kicking around.

A few years ago, this would have been a crisis. We would've had to take a cash advance on a credit card or engage in who knows what kind of financial tomfoolery to get this bill paid on time. Today, I was able to smile (after course of smelling salts and a Coke Zero) because I knew it would be completely different this time around.

We started following the Baby Steps outlined in Dave Ramsey's The Total Money Makeover two years ago. As a result, we are debt free (other than our mortgage) and have an emergency fund in place just for occasions such as this.

Preparedness is not only about surviving an end of the world scenario. Preparedness means you don't have to make last-minute runs to the store for that forgotten item because you can cover it with your food storage. It means you have the ability to take care of your family and pay your bills no matter who is president or what's going on in the world at large. It means the reverse prize patrol is nothing more than a speed bump.  Preparedness makes a difference in my every day life and, boy, does that feel good!



If you don't have an emergency fund, start today. Little bits add up. If you don't have food storage, start today. Don't wait for the reverse prize patrol to come knocking! Can I get an amen from the choir?

Month Twelve in Review and Month Thirteen Prepping Plan

I don't know about you, but the current events of the last month have really encouraged me to keep prepping. I've been only at this for a year and I feel even more fired up about preparedness than I did a year ago. I hope you all have made strides in your family's preparedness over the past month. Here's what I did:


Month Twelve in Review:

1. Added more $ to our BOBs/at-home emergency fund. It wasn't much, but I did put some of the cash left over from our vacation in our BOBs.  Even small amounts add up if you're a consistent saver!

2. Finished up the "leftovers" from Month Eleven.  I bought another case of toilet paper (I think we have about eight months worth at the moment) and got my improvised Bucket Berkey water filter.

3. Bought some additional preparedness and food storage-related books for our home library.

I bought Where There Is No Doctor, Where There Is No Dentist, Seed to Seed: Seed Saving and Growing Techniques for Vegetable Gardeners, and the SAS Survival Handbook

Combined with the books I bought last month, I have a ton of great reference material. I'll be posting reviews of all the books over the next month.

4. We continued to build our food storage. We bought 15 more pounds of honey and some more evil (but occasionally useful) shortening at Sam's, but mostly I spent my budget at Honeyville Grain and Emergency Essentials. I added more vital wheat gluten, freeze-dried veggies, split peas, barley, lentils, black and kidney beans, and freeze-dried fruit. We finally have a year's worth of legumes for our family. Whew! At least there's one item I can check off the list.

5. We were very busy in the garden. We weeded and planted, but didn't need to water very much due to all the severe weather! We're enjoying the fruits of our labor and can't wait for that first ripe tomato!

6. Enjoyed a safe vacation with my family. Disney World was fun, but there is no place like home.
 
 
My goals for June include:
 
1. Getting a dehydrator and experimenting with drying garden produce and herbs.

2. I want to stock up on canning supplies. I need more jars and I want to try out those reuseable canning lids.

4. More food storage, of course. Also some first aid items, as my budget permits. 



What preparedness projects do you have planned for this summer?

Financial Preparedness, Part IV

This is the four part of my Financial Preparedness series. You can find Part I, Part II and Part III here.
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I'm debt free so now what?: The Rest of the Baby Steps and What that Might Look Like for a Prepper

You saved up $1,000 for a baby emergency fund and then you started working your debt snowball. You put your debts in order from smallest to largest and paid them off with lightning speed. You've made a budget and, remarkably, you even followed it! Congratulations! You're better than 95% of all Americans.

Now what?

There are still five more Baby Steps to financial freedom if you follow Dave Ramsey's plan, many of which have implications for your prepping.

Keep working those baby steps!

Baby Step Three: Save up 3 to 6 Months of Expenses.

The next step is to save up some serious cash. Dave says that if you have a secure job and lifestyle (ie. no serious things looming on the horizon that could zap your cash), you can aim for cash to cover 3 months' worth of expenses. If things are more uncertain, you should have more money saved up. Other financial experts think you should have more like 8 or 9 months of salary saved up in this economy. Honestly, you really can't save too much as long as you are meeting your other financial goals (See Baby Steps 4-6).

It is important to note that this money is NOT to be invested. This should stay safe and easily accessible in a place like a Money Market Account. You should also have a good amount of it in cash at home. Obviously, you should not advertise the fact that you have a bunch of cash in your home. You should also buy a water- and fire-proof safe to store it in.

You might also consider your food storage to be part of this Baby Step. Hubby Dear does, and he has reduced the amount we are putting into Emergency Fund accordingly.

Baby Step Four: Retirement

Dave Ramsey says you should invest 15% of your income into a mix of growth-stock mutual funds with proven track records. No matter what the stock market is doing, Dave has consistently said that he believes in American capitalism and that all things will work out in the end.

Dave is against buying gold or other precious metals and certainly would not advocate putting some of your emergency fund in gold. In fact, he says gold is "the new Snuggie" - just a fad. You can read what he says about gold here.

What I didn't understand until recently is that a gold purchase isn't so much an investment as it is insurance. The difference is that you expect an investment to consistently increase over time. Insurance isn't there to make you money, its purpose is to protect what you already have. Read this piece on the SurvivalBlog for more about tangibles.

So with such different advice, what are we to do to prepare for the future?

Frankly, I doubt things like the Roth IRA are going to be around when we reach that age. The government is simply spending too much money to allow growth in Roth accounts to remain tax-free. I expect tax rates to increase exponentially.

We are going to hedge our bets and do a bit of both approaches. We're going to do some traditional investments and think about getting some tangibles as well.

Baby Step Five: College for your Kids

Many people make the mistake of taking care of their kids' college funds at the expense of their retirement savings. Your kids can find a way to work through college. Not so with your retirement!

We have 529 plans set up for each of our children. Our goal is to have enough money saved for four years at a state university. If our children choose to go elsewhere, great. They need to figure out how to make up the difference either with scholarships or by their own hard work. Hubby Dear and I were accepted to several "elite" universities but chose to go to a state school for financial reasons. We're doing just fine today, thank you very much! :)

Baby Step Six: Pay off your house

This is the Holy Grail of financial preparedness, in my opinion. Owning your house free and clear would give such peace of mind. Think about it. If you have no consumer debt, no mortgage, and a year's worth of food storage, how confident would you feel? If you lose your job or the economy tanks even further, you would be far more secure than the Average Joe.

If you currently have a 30 year mortgage or adjustable rate mortgage, you should think about trying to refinance into a 15 year fixed rate mortgage. You should take advantage of the low interest rates if you can.

Baby Step Seven: Build Wealth and Give

Dave Ramsey advocates giving during all stages of his plan. We believe in tithing and beyond, and I encourage others to do so as well. After you are completely debt free, however, you will have an abundance of money to give freely. You might consider buying extra food storage and supplies at this time. Should the SHTF, you will be in a position to give charity to others who are not prepared. This is also when you can really step up your investment in tangibles and other wealth vehicles.

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So that's my quick and dirty run-down of Dave Ramsey's BabySteps, prepper style. Read The Total Money Makeover for many more details and wise counsel.

Get debt free, and save, save, save. You can do it! We have paid off nearly $80,000 in the last 18 months and we're finally DEBT FREE!!! It feels awesome!

Remember: The borrower is slave to the lender (Proverbs 22:7). You should be no one's slave.

Financial Preparedness, Part I

The American people are feeling pretty light in the pocketbook at the moment. I don't have any solutions for our national economic problem, but I do know a way you can build a strong financial future for your family. Dave Ramsey has come up with a common-sense plan you can use to become financially prepared. Over the next few weeks I will be discussing Dave Ramsey's Seven Baby Steps and applying them to preparedness.

Baby Step One: Create an $1,000 emergency fund

The first step towards achieving financial freedom is saving money for an emergency. Dave says you should start with the amount of $1,000. You are not to touch this money unless it is a true emergency.


Your furnace dies in the dead of winter = EMERGENCY
Your car needs a serious repair = EMERGENCY
You lose your job = EMERGENCY
You run out of Diet Coke Zero and you have spent all the money you budgeted for soda = NOT AN EMERGENCY

That is something I have to repeat to myself regularly.

The reason you should start with this step instead of immediately tackling your debt is that the unexpected WILL happen. We have had a ton of medical expenses in my family this year. Some were expected (the birth of Baby Dear), some were not (two family members needing an MRI). If you don't have any money on hand to deal with life's little (and big) emergencies, chances are you will add to your debt. You'll never climb out of the pit of financial insecurity if you don't build an emergency fund. Keep in mind that this is only a starter emergency fund and you will need to save even more money after you become debt free.

Now for the prepping aspect of Baby Step #1. Having cash on hand is essential for preparedness. Consider this:

• During the Great Depression, FDR declared a bank holiday. All banks throughout the country were closed for several days. If that was to happen today, you would definitely want to have cash at your fingertips.
• If the grid goes down in a short or long-term emergency, cash or barter will be the only way you can buy goods. ATMs won't work and neither will your debit or credit cards.

I do keep the bulk of my emergency fund in the bank, but I am starting to keep a stash of cash at home. Some of it will be in our BOBs and in our vehicle kits. The rest of it will be kept in a fireproof safe hidden in my home. You should make sure that the bulk of your cash is in small denominations unless you relish the prospect of paying for a $7 pack of batteries with a $50 bill! There may not be change available when you need to use your cash in an emergency.

In his book, The Total Money Makeover, Dave relates the story of one of his listeners who put her $1,000 emergency fund in a cheap glass picture frame. She wrote "Break in case of emergency" on the paper she displayed in the frame. The frame was then hung on the wall behind the coats in her coat closet.

Many survivalists and preppers think that precious metals are an emergency fund essential. That is not a priority for me at all. I have way too many other things I need to spend my prepping money on at the moment and I'm not sure gold will end up being a quality investment outside of preparedness over the long haul. Read more about why you may or may not need to buy gold here. Dave Ramsey doesn't think gold is a great investment, but then again he thought I was a nut for storing food.

Saving money for an emergency is key, whether that emergency is TEOTWAWKI or simply everyday life.

Read much more about the Baby Steps in The Total Money Makeover. You may also be able to listen to Dave on his syndicated radio show. Dave's the man!