Tuesday, March 9, 2010

Economic Concerns

One of my big concerns right now is that the economy is in trouble across the whole world. Greece is on fire, and so is California. Iceland is in serious trouble. The US is not exactly a pillar of strength, either.
There is a lot of stress in the systems and there are a huge number of interconnections. The whole world is strongly linked together and it is full of potential energy. It is like the rocks above an Interstate that cuts through a mountain. Now that things are warming up and things melt and freeze there are more avalanches.
The whole thing could unravel. It is one of those things it isn't like a pandemic, no one will die. It won't be like an EMP event as everything will still work. It just money won't be worth anything, stores and banks may be closed for a little while.

This is where having no debt, and some food storage on hand makes things much easier by allowing you to ride out the incident.

Some people ask should they pay off debt first or stock up first. Right now I would say stop by your favorite warehouse club and grab a couple of big bags of rice and beans, few cases of water, a big jug of oil and some salt. This may not be great but it will keep you and your family alive for a month or more and you'll spend less then $50.

Now you can start paying off debt.
You can also keep building your food stocks from things that are on sale at the megamart, these should be things you normally eat.

After you've paid off your smallest debt take a part of that and build an emergency cash fund.  At this point just $500 would be good as you could replace one major home appliance (washer, frig or water heater) or car repair with that.
If you are disciplined enough you could dump all the pay-off-debt money into a saving account and have that exist as an emergency fund until you could lump sum pay off the smallest debt.