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Disasters Can Happen

Financial Readiness for Crises and Calamities

Authored By Stacey Thompson

Superstorm Sandy couldn’t have picked a worse time for it to happen. Our country is still on its way to recovering from the worst financial crisis since the Great Depression, and at this juncture, we as a country are still deciding whether to keep the same president onboard, or bestow the great responsibility of leading the country to another individual. Purse strings are tight, well-paying jobs are hard to come by, and many dread the future of our way of life. The world is changing faster than ever, in some ways for the better, but in others for the worse.

There was a time that people trusted banks and other financial institutions. That doesn’t seem to be the case nowadays, as these banks did play a part in the events that have caused us so much instability and suffering. Regardless, we must continue transacting with them as the modern world of capitalism cannot function without these institutions.

Aside from keeping money in the bank, what else can you do to assure that when a life-changing crisis visits you and your family’s life, you are ready for it, at least financially? I have gathered up a number of realistic, practical, and very doable steps to prepare for the more trying times.

Pay off Debts as Soon as you Can

Our culture is so comfortable with debt and credit that we often end up spending beyond our means and allowing our growing debt to shape our lifestyles. We must undo this excessive reliance on borrowed money by going above and beyond just paying the interest and “maintaining” the debt.

A little belt-tightening and resisting the urge to invest in non-essentials should be self-enforced. Eliminating huge outstanding balances should be a priority. When these are kept low, interest is also low. This means more and more of your money will be focused on whittling down what you owe them.

Do Not Saddle Yourself with More Debt

It follows that while you are still paying off one debt that you shouldn’t make things more difficult by whipping out your credit card and making more problems for yourself. Again, with any significant purchase, as yourself if this is something you really need. If not, just jot it down on your wish list until such time as you are more financially capable.

Connected to this idea are investments and insurance policies. Don’t be trigger-happy when it comes to these things, as they also serve to drain your income. Do plenty of extensive research before buying into any of these products. Sometimes, it’s actually better to hide  bills under your mattress.

Prepare Collateral or Liquefiable Assets

Being ready also means knowing when to borrow money or sell off properties in order to raise the necessary cash. Land titles can be used as collateral for loans, car title loans can be had as well, and various appliances, electronics, and gadgets can always fetch something in a pawnshop.

Do remember that even with collateral, they will still charge you interest. Always read the fine print, do the math, and decide whether you can actually make the payments. In almost all cases, defaulting is going to mean you will lose your collateral, and the value of what you stand to lose is often higher than the amount of money you loaned.

Purchase Emergency Supplies Beforehand

Food, water, and other essential things to living will almost always become more expensive when a crisis or calamity happens. More likely, there will be those who take advantage of such situations in order to make a bigger profit. Be a step ahead of them by having your own stash of essentials ready. You can’t control their aberrant behavior, but you can be more prepared so that you won’t fall prey to their opportunism.

Live Within Your Means

This rule applies from the humblest hobo up to the most successful billionaire businessman. Some would even suggest living a little below it, as having a surplus in resources is always preferable to having a deficit. Shop smart, save before you spend, and never be wasteful.

About the Author

Stacey Thompson is a professional writer, marketer, entrepreneur, and a lover of weird little animals. She is based in San Diego, California, and is currently conspiring with her girlfriends in coming up with their group life blog, Word Baristas.

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