February 15, 2011
By Angie Sullivan
You might not think that personal finance has much to do with preparedness, but in these rough economic times, it’s even more important to make sure you are financially ready as well as physically ready for an emergency!
If you are like many people in America, you may find yourself struggling to pay all the bills at the end of each month. You know -- too much month at the end of the money. Mounting debt can bring on your own personal emergency situation. Here are a few tips for staying afloat if you find yourself drowning in debt.
First of all, make a list of everyone you owe, how much, the monthly payment required, and the date each bill is due. Contact these creditors if you are unable to make your payment on time. Sometimes you can negotiate lower payments, or even better interest rates. Many experts advise you to begin paying off the smallest debt amount with the highest interest rate first. This method will help you see results quickly, and take care of some of the highest interest rates first.
Be aware of companies trying to consolidate your loans and in the process charge you for this service. There are many non-profit organizations available online to help you figure out your debt and pay it off as quickly as possible. Nevertheless, the very best way to keep yourself out of future debt, is to get rid of all your credit cards, except one, which you will only keep in an emergency, at home in a safe place.
Now that you are tightening your financial belt, you might need some ideas for saving money and paying off those debts. First begin by shopping grocery sales and using coupons whenever possible. Prepare simple and basic foods, they are inexpensive and healthy. For example, one serving of Nine-Grain Cracked Cereal would cost approximately 20 cents. (This is where your already stored food might come in handy during your financial emergency!) You also might want to be aware of any wasteful habits. Are there times in which you prepare more food than you use? Do you pay for more cell phone minutes than needed? Do you run to the store three or four times a week when one well thought out trip would work? (This would help prevent impulse purchases).
When you do need to make a purchase, don’t buy furniture or clothing on credit. Shop at second-hand stores, flea markets, or take advantage of local consignment shops or classified ads to find what you need at a fraction of the retail price.
Eliminate any extra costs you have in your budget. Extra phone lines that are not absolutely necessary, cable television, eating out frequently and other superfluous monthly expenses can be eliminated to free up extra cash. Little changes like watching movies at home instead of the theatre, eating lunches from home instead of purchasing lunch can end up paying big dividends at the end of each month.
Financial preparedness is essential part of your preparedness plan. Once your finances are in order, other areas of your preparedness plan will fall into place much more easily. By following these guidelines and keeping out of debt, you will find you have great pocket book preparedness!