Everybody has personal disasters. Accidents happen, bones break, jobs are lost, houses burn down, expensive mechanical devices fail, financial troubles escalate, we get sick, and loved ones pass away.
Personal disasters… or personal Stuff Hits The Fan (SHTF) moments… happen to all of us, they are unfortunately all too common, yet they are also the single-most overlooked prep by the prepping community.
Priority: Prep For The Most Likely Personal Disasters
If you’ve been reading 3BY for any length of time you will know that I am recovering from a personal disaster, a severely broken leg & torn ligaments. I’ve learned a lot of lessons from the experience, and found out several holes in our “personal disaster” prepping that we’ve had to fix.
Even though we had holes in unexpected areas, this particular personal disaster was not catastrophic for us as a family because we HAD done a lot of personal disasters prepping.
Before I go into details of my own lessons learned, let’s take a look at some core preps that we had done to mitigate the damage caused both financially and logistically.
They may sit dormant for years, but having preps ready and waiting is the key dealing with personal disasters
Personal Disasters Prepping: A List Of Preps
I’m going to list just a few things that we deem very important as our own preps for personal disasters. Of course, your list may be entirely different depending upon your situation, but I think that many of these things are relevant to all of us. Please keep in mind as you read this that we have been “in the workforce” since 1984 and it has taken us 35 years of hard work to get to this spot. Younger people starting out may think “I’ll never be able to do some of this stuff” but I’m telling you, with focus and living an intentional lifestyle, you can.
- We intentionally live a debt free lifestyle, including our house.
- We make sure we have medical insurance for both of us
- In addition to our regular medical insurance, we also have “short term disability” insurance
- We keep an emergency fund of six months expenses (minimum) of cash in the bank at all times
- We keep an additional “deductible” fund that has enough money to cover both of our medial deductibles.
- Another set of funds that we keep in the bank at all time is a “car replacement fund”, a “house repairs” fund and a “vacation fund”
- We keep a huge, easily accessible medical kit in the house at all times. Our kit contains easily accessible bleeding control that can be used by one person on themselves if necessary.
- We keep and maintain GOOD insurance on our cars, including very high limits on our liability plus an umbrella (250,000; 500,000; 250,000 with a 2-million umbrella), plus a good uninsured/underinsured motorist policy. This probably seems excessive to a lot of people, but it’s not much more expensive than bad car insurance (i.e. state minimums).
- We keep a full contact list for all financials (i.e. we keep all credit/debit card numbers, plus all of the company contact info so if they are lost/stolen we can immediately notify the company).
- Full emergency kits for cars are a must, including a full-size run-ready spare tire, all the tools necessary, a spare quart of motor oil, jumper cables, a lithium car starter, 2 ice scrapers, seat belt cutter/window breaker, etc.
- Winter car items
- Living wills & medical records
- We always carry 3 days worth of any critical prescription meds
- An extra credit/debit card unused for anything else with a different account number hidden in each vehicle
- Each family member carries 2 credit/debit cards, each with different accounts.
- A large enough amount of cash to get you home from wherever it is you are, and a significant amount of cash in the house to take care of any cash-only emergency.
OK, That Sounds REALLY EXPENSIVE!
It IS really expensive upfront. I admit it.
In reality, however, by the time the above is fully implemented, it turns out to be a lot less expensive than what most people do.
Why?
The key to all of the above is that, once executed, there is no ongoing outgoing interest payments… instead, there is INCOMING interest payments. True, right now, banks aren’t paying enough to keep up with inflation, but it sure beats paying them 10-24 percent!
As you can see, our number one way of prepping for personal disaster is financial independence, which is something you can ONLY really do if you live a debt free lifestyle.
The debt free lifestyle is FAR outside of the scope of this article, but we will be doing a whole series of debt-free prepping starting soon here at 3BY.
We Don’t Live To Impress People
I will say that we own our own home, we own The Place, we own all of our own vehicles, all of them debt free. While that sounds amazing to a lot of people, I’m going to be brutally honest here when I say that we are willing to make sacrifices up front so that we don’t have to be slaves to a paycheck.
Living debt free and prepped is a choice, but it’s still a HUGE commitment. It means, for most of us, we can’t do what other people do. We can’t go out and buy new cars or season tickets to our favorite sports teams. We can’t spend nights drinking away our paychecks at a bar.
We have reliable cars but they are not new. We have a paid for, well maintained house but it’s 100 years old, and we have lived in it for 30 years. Spice and I don’t buy stylish furniture. We don’t have a big fancy TV (although those are cheap now), and we don’t redecorate every 5 years. We wear pedestrian, utilitarian clothing.
In short, our lifestyle will impress nobody.
We’ve never owned a new car, not one.
Having said that, if our car were destroyed today (not even counting the insurance payment) I could go out today and write a check for a replacement. Why? Because we make a car payment, to ourselves, every month.
It’s All About Priorities & Forward Thinking
Everybody (who doesn’t sell the stuff) hates insurance.
I hate insurance. I hate it with a passion. It’s a rip-off, and we all know it’s a rip-off. Having said that, it allows us to have financial security for things we can’t afford to take a big hit on.
When I broke my leg, it meant that I could put no weight on the leg for 8 weeks. My foot was in this enormous cast for much of the time, meaning I couldn’t drive.
My job involves being able to drive up to 500 miles a day, if necessary.
Obviously, I couldn’t do that. Does this mean I lost my job? No, I work for a company that holds places for injured employees.
Did I lose my income?
No, because I had Short Term Disability insurance as a part of my employer’s insurance plan. With the plan we are on, it’s optional and we pay for it out of our paychecks (i.e. it’s a post-tax payment). That’s crucial, because it means that the insurance payments are tax-free to me. I got 60 percent of what my salary would have been before taxes (so, pretty close to what I really earn) which took the bite out of the accident.
Having that insurance meant the difference between 3 lean months and three normal months financially. In reality, with the way we work our budget, it paid for most of my deductible plus out-of-pocket maximum.
Salty, C’mon Man This Is BORING!!!!!!!!!!!!!!! Where Are The Guns? Where Are The Zombies!
Sorry, folks, prepping for personal disasters isn’t fun. There’s no AR’s. There are no zombies.
But you want to know a secret? You are a lot more likely to slip on the ice or in the shower than you are to come face-to-gun barrel with the walking dead… so let’s get back to boring.
Our Financial Plan Covers Us
The bottom line here is that we worked very hard to pay off our debts years ago, and instead of taking on new debts, we set up funds that we pay to ourselves. We have a house fund for repairs, a car fund, and a deductible medical fund which knock out the biggest threats to our overall emergency fund.
Yes, this does sound very Dave Ramsey. We agree with a lot, but not all, of his plans (yes to the debt part… investing? Not so much).
We even have a vacation fund, but it gets funded LAST.
We think that the best thing preppers can do (besides having the obvious preps of water, enough food to eat, heat, etc.) is to make debt elimination the highest priority. Once you don’t have to live paycheck to paycheck to pay debts, a whole new world of preparedness opens up for you.
That world helps you knock out all of the preps you REALLY need, the preps for personal SHTF moments, because unlike zombies, these personal disasters happen every day to us all.
All excellent financial planning Sir! Debt free is my comfort zone. Wealth in the bank balanced by tangibles like a deep pantry, skills, reputation and tools to start over if a Bank Holiday/Credit freeze occurs makes me happy.
The main thing I could add is cultivating excellent friends that will willingly come to help for small things and large. Insurance is great but having friends you would loan a car to and they to you is often the best blessing when some lawyer or Bank issue has your assets locked up for some reason.
A small example was our recent heavy snow storm followed by a couple of inches of rain. Yes insurance would cover the roof damage but having a couple of friends Call and Ask if I needed help roof raking was comforting.
Good friends like successful marriages and productive gardens require time, investments and effort.
Sir, I agree with most of exactly what you are saying.
I have zero debt outside my Home Mortgage, and that’s going down ASAP.
I do disagree with your ‘trusting’ the Banks with (so it seems) holding your cash/monies. Sorry, I do NOT trust Banks, the .gov nor TPTB with even a single dime that’s I have worked so hard for. I use the banks for transactions that need “checks” or a bank transfer, but not holding everything I have worked so hard for. Why you ask? I defer that question to many MANY EU countries and Venezuela.
But I regress, and agree again, being debt free is the key to a good “Lifestyle”
PS; Insurance is the biggest scam in the world, BUT very necessary, I was in a wreck whereas I was 100% at fault, fortunately nobody was injured, but the Dodge Durango was totaled (My Scout needed a fender and some minor body work). The Insurance CO wrote a $18,000 with only one question, “were you at fault”, Yep my fault, they paid within 1 week. BUT I still hate Insurance Companies.
If you don’t use banks for your cash (and I hear what you are saying), what do you use? Are you a “hide cash around the yard” person?
PEPPER;
I stuff it in the mattress and in Mayonnaise Jars buried in the yard…. HAHAHA
Of course I’m not having that kinda cash laying around the home.
There are simple and secure places to “have” cash whereas the feds cant get their grubby hands on it.
Plus they would toss ya in prison if that fine that, declaring your MUST be a Drug Dealer of doing “something” Illegal.
Just make dang sure you keep good records how and where you obtained the $$$$. Remember the IRS is NOT user friendly.
Salty have you seen the 2 part article at the Survival Blog about the 1983 Mexican Currency collapse from the viewpoint of an American teaching English down there? Very interesting to see how fast the “Rules” we expect can be rewritten to prune our bank accounts/retirement accounts and such like what happened in Cypress and Greece.
Thus my wary nature in depending on the rules and goodness of banking to protect me 🙂 Electronic dollars can be modified as the Government/Banks needs require.
Tangibles, needed skills like shoe repair/plumbing/house repairs etc. skills, tools and reputation of honesty carried many of my Great and Grand Parents through the Great Depression here and in Weimar Germany hyperinflation/economic collapse.
Good points. We don’t really trust the financial system either; yet using it has some real benefits. We consider it a form of diversification: Some of our resources are in the standard financial system, but others have gone to buying/improving The Place, experimenting (as a form of skill development), putting in perennial food production, getting quality tools, etc.