Every month I have a budget that I use. It doesn’t really change from month to month in terms of who gets paid, but the amounts differ for some things. I pay the exact same amount for utilities every month, regardless of what the bill actually says, so i usually have a small credit balance with them. I like the predictability of knowing I’m paying the same thing every month. It makes planning a lot easier and builds up a little cushion in case things fly off the rails.
But…some things I pay a percentage, rather than a fixed amount. Every paycheck I put 10% into savings, 15% into my retirement, 5% into my HSA, 10% into my emergency fund, and 5% into my Piece O’ Nowhere fund. That means that 45% of my (after tax) paycheck is gone …whoosh!…before I even see the cash. Or, in other words, I’m living on 55% of what I make. And, trust me on this, I don’t make a lot. In fact, according to various sources on the interweb, I make well below the average median American income. Way below. So how can I live on 55% of my paycheck?
Well, it isn’t an existence of big-screens, $5 latte’s, new cars every four years, and trips abroad ‘because I deserve them’. I have a paid-for house, paid-for truck, no medical/student/creditcard debt, and I live within my means. I eat leftovers, I eat out once a week, I use the same computer for years at a time, I take the high deductibles on insurance, I shop around, and I am content with ‘good enough’ most of the time. The only luxuries I really indulge in are guns.
As a result of all this, I get to feel fairly secure. And it’s that feeling of security that makes it worth the effort. Althoguh, to be fair, after a while it doesn’t seem like an effort at all. I’ll walk through CostCo and, yeah, that 84″ high definition TV sure looks good…but then I ask myself which I would rather have when I break a leg or lose a job…the TV or the couple grand in cash? Then it becomes an easier choice and a small TV doesn’t seem like such a bad thing.
The economic craziness we’re in (thanks Joe!) is a lot easier to weather when you’ve got something set aside for just these sorts of emergencies. Can everyone do it? No…there are plenty of people who have come late to the financial responsibility party and are bringing in baggage….mortgages, car payments, student loan debt, etc. Its like starting a race with lead weights tied to your feet. But, you know what, even with lead weight tied to your feet you can still run faster than if you didnt try running at all.
I don’t like telling anyone what to do, youre a sovereign individual…you do you, buddy. But, I can only tell you what”s worked for me and you can decide if thats something that might work for you. I’ve been living on a budget, and not a very tight one, for almost twenty years and it’s made my life a lot easier than it would have been if I didn’t have it. You can go back in the blog and see where water heaters have puked and alternators have died and it never amounted to more than a minor hiccup in my life. Wasn’t always that way, I promise you.
I know, I know….this is a blog about preparedness, not personal finance. But the thing is, personal finance is part of preparedness. If youre the kinda guy (or gal) who keeps a spreadsheet of how much food, motor oil, and ammo they keep on hand then you shouldbe just as diligent about knowing where each dollar you make is going to go. Thats all a budget is…it’s a plan for what youre going to do with the resources you have. You make $3,000 per month? Write down how youre going to spend all $3,000 next month. Spend it all on paper until zero remains. Then stick to that budget as best you can. Next month, tweak it a bit. Next month, a bit more. Pretty soon you’ll know exactly what you need to allocate and where.
2023 promises to be no better than the last two years, so getting your ducks in a row regarding money…while you still have some….is probably not a terrible idea.
Amen.
Saving isn’t sexy so it’s hard for most folks to do. When we realize it’s about 99.999999% more likely you’ll lose your job or portion of your income over your lifetime than fight an invasion of the Soros-UN shock troops (or whatever your Red Dawn fantasy of choice is) then you realize why you need that extra $500 in savings a lot more that that extra $500 in ammo.
Honestly, I think most of the reason preppers secretly pray for the apocalypse is so they can stop having to go to a job they hate and pay back the debt they’ve accumulated.
Youd be surprised at how many people I know whose plans for economic and social advancement are predicated on the apocalypse.
Yup… very well said!
about 13 years ago we (me and Mrs.) had a huge medical debt, maxed out on the cards, mortgage was eating at us and the usual bills all complicated by no regular work for over two years up to that point. Got real lucky and got a great job and had to relocate. Sold off or dumped whatever we could and moved. Managed to pay off all the debts and settle on the medical bills so by year three of new job we were OK again. Got a new house the next year and have been paying “double” on it so the principal is shrinking to where it’s paid off in just a few more years.
We were able to retire and are now still paying off house on schedule, have a debt free new car and zero debt. The regular bills are very manageable and we’re doing ok as retired old farts. A big key to this was our envelope budgets.
Envelope for saving – cash in first thing every pay check. Another one for food, one for medical, car maintenance and other usual categories. When the envelope was empty, that activity was done until next cycle. Using cash made it very real every time you paid for something and at the end of the month going over all the receipts from each envelop helped us to fine tune and hone in on saving more. We are still doing it today and it sure works for us.
GR8 post sir, a JC professor told me decades ago,
That double payment of a 30 year mortgage, paid it off in 5.3 years !
He was correct, done it 3 times. Thank God that old fellow bought a car that day and I was there.
And enough left over to support 10-15 million non-citizens, pay off college loans for a few hundred thousands (Gender Studies is vital to our Nation) and for wars in countries we may not be able to find on a map. Good job!
Nice to know someone else is in the same boat. A good boat to be in. Living within ones means also leads to a mostly stress free life.
Agree. This is that street smart, lived life wisdom that allows you to rise above those spastic normies and be prepared generally as well as adaptable to any upsetting incidents that are sure to arise. My tale of woe was when unemployed and scratching dirt with the chickens getting by until catching another job I had went to the plasma donation center twice a week to get tapped and drained for some extra cash. Did that for three months and plowed that money right into food and house supplies as well as pay forward utilities. This was so as to not burn through my own cash as things dragged on. A good eye opener experience, being amongst those folks, and knowing I was just gaming and strategizing the experience for farther out contingencies. Got back to work and things normalized. Wasn’t handsome enough to be a gigolo, so it was the plasma route. Stay frosty and flexible.
Two things. Yes CZ your right. It doesn’t pay to piss away your money. Every penny of those checks we all got from da Gummit went into the bank. Glad I did. Last January almost a year ago my wood furnace and my only kerosine heater crapped out on the same day. Ordered a new furnace and bought a new heater as well. Now I have two heaters with replacement wicks for both.
Now the second. I read a lot and do research on a daily basis. Not saying this is going to happen but. Evil does repeat itself.
China after nearly a year of total lock downs to the point people were starving in their homes. Not allowed to violate the Zero Covid policy.
Now all of a sudden last week they lifted the ban in international air travel to China. This week they did the same for their citizens. Which tells me a couple of things. First with the next US Presidential election starting to ramp up beginning this year. There is a very hi probability that the next viral weapon will be released. This time the New World Order will not leave anything to chance. In their talky book it was a rehearsal for the next. Cause a pandemic and steal a Presidential election then lock the entire world down tight. The killed roughly 3 million people by the count I saw. But young healthy people are still dying and now the truth is coming out. Anybody under 55 doesn’t need these stupid vaccines. More people have now been killed by the vaccines then by the virus. And it will keep on.
Part of the plan recently released by the New World Order to cut the population of the world by half by 2050.
The next weapon is ready. It will be released most likely in the late part of this year. And you can bet Joey the Drooler will be more then happy to go along. After all. He’s been promised another 4 years as Dickhead.
From the information In seeing everyday. This is my best guess. I had this first pandemic origin pegged from the start. To many things ruled out that this was a natural occurrence. It had to much in common with a bio engineer pathogen. And it’s location if outbreak was Wuhan and mist folks know that this has happened before. The weapons lab there has lousy security. Many if the people employed there to care for the animals used for testing. And charged with the destruction of those animals after testing was finished. Have been known to sneak them out and take them to the wet market and sell them for food. This has happened before.
All I’m saying is the facts when added up tells me this who thing isn’t done. More to come.
If you get a chance take a look at what’s happening in Brazil.
The wife and I have always lived below our means with enough cushion that one of our paychecks was always enough to pay for our mortgage payment and groceries/lights. In our late 60’s now, but our little nine acres and two homes on it is paid for. (It’s not too bad having that rent income from the smaller place). We do keep a newer car, but my ’01 ranger has clocked over 260 thousand. We may treat ourselves to a movie and dinner every two months or so. It is nice having a few bucks in the emergency fund.
CZ, I can’t remember that you’ve used the name Dave Ramsey, but he’s pretty much the godfather of the envelope budgeting system and the strategy of giving every dollar a name (purpose) before it’s earned each week/month. At first Dave comes across as a little egotistical, but as you listen to him work with people on his radio show you’ll quickly learn that he’s a strong Christian with a heart for helping those who are down and out financially and drowning.
I’ve been known to tell folks that I found Jesus as a young child, but I didn’t “find” Dave Ramsey until my late 20s or early 30s. Dave likely wouldn’t like that statement, but it’s true, both have had a huge impact on my life. I have numerous teachers, relatives and friends on that same list.
Working folks often have trouble listening to Dave on the radio during the day, but you can find all his segments on YouTube. I highly recommend you check him out.
My mother always said a truly rich person lives below their means. When my parents passed, my inheritance proved that!
Ha !
GR8 for You sir…
Nicely done with the debt load! About 2000 I ran into a series of financial issues which resulted in my near bankruptcy and rapid education in debt management and fiscal responsibility. I avoided the bankruptcy issue and paid of my debts. I had help from my bank and by 2007 I finally paid off all my debts. I have remained debt free since. I don’t own property(that was part of my money issues, I lost a lot on a house) but I am saving for it. I can make it with the increased interest rates although I will be paying a mortgage until the cows come home. I’m in my late sixties and will always have a monthly bank payment until I die I suppose. I have planned my expenses in about the same manner as you have CZ, I pay a percentage each month in investments, savings and day to day spending. I have found that I do not need very much to spend monthly as I have 99% of what I need and now purchase as items need replacement. The one thing I took away from my money troubles was how easy it is to fall into the “instant gratification” mind set. As you pointed out over the TV Set. Younger people starting out want everything now and most are not disciplined enough to wait and save for things that are needed. The trap of easy monthly payments is also difficult for many to turn down and seeing as many didn’t get money management lessons from their parents(I sure as heck didn’t) or from schooling, it is not surprising that so many people are so deeply in debt. I was fortunate in that I learned that lesson, even if it took me into my forties before I did.. Thanks for you articles I enjoy reading them. TTFN
2007, we owed $52k on credit card debt. We had gone from a dual-income to a single-income and the kid was in private school. T hen I was diagnosed with cancer (2007). I had been trying to work debt down by myself. My cancer woke my wife up (took twice as long in surgery as predicted). We started the Dave Ramsey Debt Snowball method and within 10 months had paid off that debt. I took a 2nd a job and my wife went back to work.
The nice part of paying off the debt was – my daughter’s school did a missionary trip every year to Africa. Her senior year (when we got everything paid off and a nice cushion), they needed another chaperone to take the number of kids wanting to go. My wife and I talked about, while we couldn’t physically go ourselves, we could pay for someone to go. In the end, because we had been responsible with our money, 13 kids, instead of 7, got to experience missionary work in Africa.
The house has been paid off for years, the vehicles have been paid off for years. We also do the “bill averaging” with us staying one month ahead on bills, to buy time, if something should happen. The property taxes are paid (with set aside for next year ASAP), our AO, you don’t REALLY own your property (don’t pay your taxes and you’ll find out who REALLY owns it, they’ll show up with guns and uniforms).
We have been debt free for over 12 years.
The best thing we ever did.
We work a plan similar to yours.
Being frugal does not mean doing without
One thing tbe people in this country need to demand. A return to the gold standard. In 1973, the year we came off the gold standard I bought my first pickup. Nothing fancy. Standard cab 3/4 ton. 4 on the floor. Mats. And a V8. $3210.00. Six years later I bought another truck. Ford F150 5/8 ton. Same cab and floor mats. A work truck. This one had the 300 inline 6. But it was 4 wheel drive. That one cost me $6600.00 out the door.
Trucks had more then doubled in price. And I got less truck.
The gold standard was the last thing the Progressive left needed to get their way. Spend like drunken Marxists and just print and print like the Weimar Republic. The gold stand reins that in. The price of gold in 1973 was $72 an ounce if memory serves. So for every ounce of gold the government could print $72 worth of paper money.
Now it’s anything goes and the sky then the moon and then the sun’s the limit.
Politicians are like any other addict. They will keep spending and printing till one of two things happens. The country fails like Wiemar did. Or the people put a stop to it.
It took the Progressives from the 1920s till 1973 to get the legislation passed. It has failed miserably like most smart people predicted.
This is the kind of article that is difficult to hear for some people, but it is also advice that will improve their lives and ability to survive and thrive.
Thanks for the content.
Dave Ramsey!
My parents always had small savings accounts at the bank for vacation, Christmas shopping, plus a regular saving account. They bought large items on lay-away at a few stores. I think their example showed me how to save, not spend.
Is there a Dear Abby present?
We are doing well financially (401ks not so much – thanks Joe). 6 years left on our brand-new house (lucked out and sold old one at the top of the market). 2 kids left at home, one young. Got a portable gen we break out as needed. Save religiously, 8 mos emergency fund. She is going to annual bonus well in March. I (retired, 62 w/PD and at high cardiac/stroke risk) am trying to get things ready for me not to be around, JIC. We anticipate things will continue to worsen…
Do we do #1 or #2…
#1 – pay 1 yr ahead on mortgage, and use the rest for a whole-house gen and a dedicated 1000-gal LPG tank (Don’t want wife to have to deal with it in the event of an emergency), and bank the last 30k
#2 – pay 2 yrs ahead on mortgage, and bank the rest
Either one is good…which is best? Good args for both. I know, we are blessed to be in this position. 1st world problems, et al.
In either case we anticipate paying another 1-3 years ahead next year assuming job rug not pulled from underneath (low risk but anything is possible).
Is the main drawback of #1 your wife having to deal with the gas tank without you? If you choose #2, are you planning on getting the gas tank a few years down the line? If you’re going to have your wife prepare to deal with the tank, eventually, then maybe sooner (choice #1) is better. Will your mortgage or will the tank be more expensive in the future? Maybe your wife can benefit from more practice with the tank/generator while you’re still doing ok?
It’s not a practice issue; she is a smart cookie and the instructions are written out. It’s schlepping the portable genny out of the shed and hooking it up, possibly in the dark, rain, snow.
As you asked (good questions!) it’s really only a question of timing what now and what later. I could stroke out any time, or make it to 90. For her sake I want to minimize complications and effort.
I think we’ll get the big genny and ATS now and wait another year on the house payoff.
Thanks for clarifying. I hope it all works out for you! It sounds like you have good things going.
Blessed beyond measure…now if the proggies would only take their foot off my kids’ neck. Unfortunately not likely..
My husband and I have been known to splurge, but for the past 25 years, have generally lived under our means.
Recently, I bit the bullet and bought a new car. It wasn’t fully stripped down and cheap – I live in Snow Country, so bought the butt-warmer seats and remote start. Not essential, but oh-so-appreciated.
But, it wasn’t going to cause us to dip into savings to afford. Our income comfortably allowed us to purchase it, even though we are both retired. That is the result of 85% of the time, sticking to budget, and living under our income.