Steadfast FinancesCould You Be an Economic Survivalist? - Steadfast Finances

Could You Be an Economic Survivalist?

Filed in Bargain Hunting , Frugal Living , Personal Finance 2 comments

Food stockpile guide, 1972For the last decade, life was all about living to excess.  Not only did we spend all the money we made, we borrowed an additional 90 bucks only to pay back a $100 when the credit card bill came at the end of each month.

And that was considered the norm!

As far as most of us knew, it was OK to spend like crazy because everyone felt rich thanks to the wealth effect that accompanied our irrational exuberance.  Many of us felt like the nouveau riche thanks to stock market bubbles, real estate bubbles, and let’s face it — everyone else was doing it so why shouldn’t we?

Today, one stock market crash and a popped real estate bubble later, we’re singing the opposite tune.  One where we value conserving as much as our paycheck as we can (if you still have one) and cutting costs where ever possible.

In fact, so many budgets are being trimmed, that USA Today says that a select few are becoming survivalists.

Could You Be A Economic Survivalist?

When I think of a survivalist, the Hollywood stereotype of a mountain man shacked up in a cabin somewhere in Alaska with a long beard, a double barreled shotgun and a smoke house out back to make reindeer jerky comes to mind.

But like most stereotypes, it’s complete hogwash.  In fact, I would estimate that a decent percentage of Americans have become economic survivalists (especially personal finance bloggers) without acknowledging it.

And once you begin to think about it, becoming ultra conservative with your personal finances really doesn’t sound all that difficult or abnormal.  All you really need to do is stock up on a few basic things and you’re halfway there.

What would you need to do?

  1. Cash is King.  One of the best ways to make sure that you can survive an economic downturn is to keep a larger than normal reserve of cash in the bank.  Just be sure to find the highest savings rates that you can find to keep up with inflation (hint: rewards checking accounts pay 5-6% interest up to $25,000).
  2. Food and Supply Stockpiling.  Pack away a small to medium amount of dried, canned or frozen goods that you find on sale.  If you really get into it, you can go a few steps more and build a sizable cache to last a few weeks and maybe a month or two.  Just ask yourself what would happen if the electricity went out for more than three days.
  3. Recession Gardens/Victory Gardens.  If times are extra tough or you enjoy gardening, try growing the foods that cost you the most money.  Home gardens can yield as much as a 17 fold return ($1700 eaten for $100 spent) according to some industry experts.  To take it one step further, you can always try canning your veggies and store them for later use saving you money year around.
  4. Cut Frivolous and Luxury Expenses.  If you pay hundreds each month for little used goods or services, why not eliminate them from your monthly budget.  Trading down to digital cable to public television, killing off your landline for Skype, or reducing your thermostat by a few degrees are excellent ways to reduce the amount of outgoing cash.
  5. Spend Only When Necessary.  Savers might suffer from the occasional case of saver’s remorse when making a big purchase or the frugality-haters might call you Scrooge, but at the end of the day, the less you spend the more you save.  Rich people get rich by convincing you to give them your money, so the more money you keep for yourself, the more money you’ll be making by earning interest on your deposits.

As all things in life, moderation in key.  Personal finance (at least to me) is more about finding your comfort zone and sticking to it than following a rigid financial plan.  Some of the above suggestions can be considered extreme and others can be considered everyday life.  It all depends on your upbringing and most importantly, your point of view.

Got any other suggestions for an economic survivalist?  What would you, or do you, stock up on during recessionary times?

Photo by Seattle Municipal Archives

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Posted by CJ   @   16 April 2009 2 comments
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