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Get Out Of Debt While You Can

March 23, 2011

Financial

Debt, even under the best of circumstances, can be stifling and worrisome. It can lead to many sleepless nights fretting over how to make the next month’s payments. Problems with debt are even more profound when the end of the world as we know it (TEOTWAWKI) happens.

Our current way of life depends on a widely-accepted set of principles that are deeply woven into the fabric of our modern society. The standards for acceptable behavior are but a thread in that thin fabric. If those principles change, the threads begins to unravel and our way of life is forever altered.

Money After TEOTWAWKI

TEOTWAWKI changes everything. The rules that currently govern our financial, legal, and other systems will no longer apply post-TEOTWAWKI. Cash on hand will be very valuable at first since ATMs and other forms of electronic money will be limited or unavailable.

As time passes, the value of the paper-based currency will diminish. It’s the physical assets that will matter most. Bartering will become the norm.

Creditors will quickly become aware of this new reality and take action to protect their investments. Unscrupulous institutions may send “agents” to collect the balance due on a loan or repossess the item used as collateral.

That EMP-proof 1970’s model Jeep that you financed may not be there for you when you need it most. The Credit Union that holds the note may come calling, taking it by force if you can’t pay off the loan. “But that’s not fair!”, you say. In the new post-TEOTWAWKI world, there’s a new definition of “fair”.

Preparing For The New World

As a prepper, there are things that we can do to protect ourselves from the coming collapse.

  • Make a budget. Fiscal responsibility before the collapse is one of the best ways to prepare for the life after the collapse. Get your financial house in order by creating a monthly budget. Be intentional about your spending. Know where your money is going. Track your expenditures for a couple of months. Then change your buying habits to match your priorities.
  • Identify the what you need to buy. Regardless of how long you’ve been preparing, it’s doubtful that you have everything that you’d like to have for the coming collapse. There’s alway more ammunition, more food, more hand tools, and more training that you’d like to have. Inventory what you have; identify what you lack. Prioritize the items that are missing so that you know what to work toward first.
  • Prioritize your expenses. Once you recognize that your own preparedness is not where you would like to be, it’s tempting to immediately rush in to fill the gap using money that you don’t have. That’s foolish, short-sighted, and could be costly in the long run. Make it a priority to pay off debt as you collect the items you’ll need post-TEOTWAWKI. As with most things, balance is key.
  • Keep paper copies. Going paperless for the environment is a worthy goal. But what happens if the electronic devices that store all of your financial documents fail? Can you prove that you’ve paid off your auto loan? Can you prove that you own your house? Keep paper copies of key financial documents. They may not carry a lot of way in the new, post-collapse economy. But then again, they may mean the difference in keeping your Jeep and having the guys from the Credit Union driving off in it.

If a lot of us are wrong and TEOTWAWKI is not just around the corner, reducing your debt is still a good thing. But if we are right and TEOTWAWKI is looming just over the horizon, reducing your debt now could be the difference between having the supplies you need and being out of the street.

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