This came in email today;
I was wondering how you came to decide on your quota/budget/allocations you do for things like gold, silver, ammo, IRA’s, cash, storage food etc. You just figure a percentage of income to each category or? Was wondering if you did some research to arrive at your system or perhaps you have tweaked it over the years?
So, really, a couple questions there…how do I decide on quotas, budget, and allocations.
Well, there’s a ‘baseline’ level.. I want to have X amount of food on-hand. I want X amount of money in the bank. I want X amount of silver set aside. That process is pretty much a “sit and think, then guess” sort of affair. Food? I’d like at least a years worth, right? Okay, so think about what I like to eat and how much a years worth of it looks like. There’s your quota, or total. Same for everything else. Establish a baseline amount and then add to it.
Example: I wanted the ‘Dave Ramsey’ style emergency fund. Started with $1000 in the bank. Ok, that covers most small immediate emergencies. Now what? Well, I’d like to have $5k by the end of this year, $10k by next year, $15k the year after that, and I’ll call it ‘fully funded’ when its at $20k. Alright, that looks like $416 a month to put away for emergencies. So..I do that. Extra money comes in, I put it towards that, which reduces the amount I need to come up with each month. If I get a windfall..say $2000…and finish my goal for the year early, great…now I can use the resources that would have gone towards that for other things.
Budgeting is easy….You know youre going to make, say, $3000 this month. Spend it all on paper at the beginning of the month. $1000 rent, $400 food, $300 utilities, etc, etc. until you’ve spent all $3000 on paper. Thats your budget. Every greenback has an assignment or mission. There shouldnt be any money that doesnt have a task assigned to it…even if that task is just ‘fun’ or ‘preps’ or ‘hookers-n-blow’.
Allocations are very haphazard. Once I write out my budget, I know I’ll have, say, $375 available to me each month for prep-related stuff. Ok…15% to silver, 15% to gold, 40% to food, 15% to gun stuff, 15% to other gear. Its arbitrary but thats the numbers I choose…you can choose whatever you want….50/50 guns and food. Or 20/80 food and gold. Only you know what your goals are. Unexpected windfall? It gets spent to the same allocation.
My budgeting and allocations are based on a yearly budget. If I want to have $5k in the emergency fund by the end of this year, and I get that $5k in the bank by September. Do I put those resources to next years emergency fund budget and get an early start on getting next year done? Not usually. I treat each year on its own. If I finish early for this year, then I work on one of the other goals for this year.
I can’t tell you what to do, I can only tell you what works for me. But if you want my suggestion, I’d tell you exactly how I do/did things:
1) Establish a baseline amount of the item you want. It could be a period’s worth of food, a dollar value of cash, a weight of silver/gold, a quantity of ammo. Whatever. Just get a number to start shooting for as a goal.
2) Figure how much you need to do of that thing each month to get to the end of your yearly goal. X ounces each month, X dollars each month, X gallons each month…whatever.
3) If those amounts are do-able, do them. Follow your plan as religiously as possible. If the amounts aren’t do-able, revise your end-of-year goal so that the monthly contributions are do-able.
4) Set the goals for several years out. I go two years out past the current one. Life happens, you may not meet your goal in a particular year…carry the unfinished parts through the next one and try harder.
5) Decide what happens when your goal is met. I met my emergency fund goal a while back. Do I stop contributing? I could…I met my goal, the amount in the bank is good enough to cover 99% of any emergency. But…you can’t have too much money, so my modest goal is to increase it by 10% every year. An easy enough goal. Some things, like certain guns for instance, when I hit my goal I’m done. Divert the resources elsewhere. Only you can decide what items are ‘enough is enough’ and what items are ‘at desired level, now just maintaining and slightly growing’.
Thats really it. Just open a spreadsheet, make a list, and start budgeting. Once you’ve got your budget, You’ll know how much you can spend on a particular need. Stick tot he plan, stick to the budget. Sometimes you gotta go off-script, but if you can stay on the plan, stay on the budget, it makes life a lot easier.
