Lacey Smith

Prepare: 3 Months of Savings

In Uncategorized on June 16, 2011 at 12:00 pm

The last step in my short-term preparation suggestions is to build three months worth of savings.

This is not new advice, and three months will hardly see you through long-term unemployment, but it’s a good start.

Especially when coupled with three months of food storage and three months of regular debt payments, three months of savings puts you in a solid place to weather up to six months (or possibly even more, depending on what you save for and how you ) of hardship.

Let’s use the same numbers as we used yesterday. Let’s also suppose you’re going to need this three months savings for a job loss or another situation where you are not earning income.

You’re expenditures every month won’t include income tax and you’ll rely on the three months that you’re ahead on your car and mortgage payments to get you by, so what’s left is media ($200), entertainment ($50), groceries ($300) and utilities, gas and insurance ($500), a total of $1050 a month.

If you decide to live on your 3 months of food storage, it’s $750/month.

From yesterday’s numbers, there is a $470 “surplus” that will be totally freed up eight months from now when you’re not paying ahead on your car and mortgage. This goes toward your savings.

It will take five months to build $2250 in savings, and you’ll have an extra $100 left over, which you should use to celebrate.

From here, I suggest you add an extra $900 to your savings (which would take an additional two months, with 40 leftover) to go towards the grocery bill so you can preserve your 3 months of food storage.

One additional note – you’ll want to put this money some place you don’t have immediate daily access to it (i.e. don’t try “saving” it in your checking account). You may want to even open up a completely different account or put it into a CD with no withdrawal penalty.

Thirteen months from now, all of us could have three months worth of food storage and emergency savings and be three months ahead in our debt payments. This would be a huge step towards self-sufficiency and go a long way to fixing our long-term economic problems.

It’s not the only solution; it won’t bring back jobs or solve the country’s debt crisis; it IS part of the solution and would be a dramatic shift in national attitude.

Possibly the biggest obstacle to our ability to do something like that is our attitudes, but if want to be part of the solution we will evaluate our attitudes and adjust if we need to.

This week I’ve focused on things we can do to increase our self-reliance. I really believe that we’re the solution, not the government. When we remember that and trust ourselves I think things will start to work out.


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