Financial Prep

Financial Prep

Sometimes when we discuss emergencies we are focusing on natural disasters, but realistically we are more likely to face personal crises that in and of themselves are emergencies. Think job loss, car accidents, mental health struggles, medical emergencies, expensive vehicle repair, inflation that outpaces income, abuse, addiction, death in the family, health issues, unexpectedly becoming caretakers, etc… Many of these emergencies can be more easily resolved if we are financially prepared. Some of them would not be emergencies at all if you had an emergency fund to take care of it. In this article we will discuss how to create a budget customized to your individual circumstances, calculators to help you know what to do with your budget and ways to stretch your dollar.


Create A Budget

Budgeting is simply figuring out how much income you have, how much expenses you have and making your expenses fit within your income (budget). To make this super simple, we have created a FREE - Budget worksheet that you can access here. 

Creating a budget is more simple than you might think. Many banks and credit unions have tools on their websites that will sort your purchases into categories for you and you can use that data. You can either look back and see how much you have spent in the past, or look forward by deciding how much you can spend on each expense and not spend more than that. If you need more for your food expense, for example, then know that you will have to take money out of another expense (e.g. clothing) to pay for it, making the expense in that category less. 


Helpful tips: (these tips may or may not work for you, figure out what will work best for your individual circumstances and don’t worry about the rest) 

  • Do not use cards to pay for purchases. Use cash. Write the name of each expense category on an envelope and divide the cash up into each envelope with how much you plan to spend in each category. When you need to make purchases, bring the envelope with the cash designated for that purchase. When there is no more cash left, you know that you cannot spend anymore on that category until you receive more income. If you need more then you will have to take cash out of another envelope and have less to spend in that category.
  • When paying off debt, pay off the smallest debt first and then you can use the money that you would have paid on that debt to pay off the next smallest debt, and on and on until it’s all paid off. 
  • Only use credit cards if you are disciplined enough to pay it off every month before interest is accrued. When you get a credit card, make sure that you get one that gives you cash back or has some sort of rewards system. I have a credit card that I use for everything even though I have enough money to pay for it with cash or my debit card, because I accrue rewards points every time I use my credit card. Then I pay off my credit card every month before interest is accrued. Every year around October I turn in my rewards points from my credit card for cash or Amazon gift cards and I use it to pay for Christmas gifts that year. It’s essentially free money as long as you are disciplined and diligent enough to not spend more than you have and to ALWAYS pay it off every month before interest is accrued on your card. I get Christmas gifts paid for practically free. You might not need Christmas paid for, but I’m sure you can think of something to do with that extra cash, (e.g., pay bills, pay off debt, increase your grocery budget each month, have a little extra spending money, etc…). I cannot emphasize enough that you should only do this if you have the money in the bank to pay off your card every month and you do it consistently. Otherwise this will cost you more money than you gain.

Financial Power Tools

Now that you have created a budget, what do you do with the information you have recorded? I recommend going to this website. Do not be alarmed, it is a church website. Don’t let that distract you from the goal of becoming financially prepared. I appreciate a church’s financial calculators, because I don’t feel like they are trying to sell me financial products.  Scroll down to find the financial calculators. They have calculators that will help you calculate the following things:

Using these tools can help you decide how to move forward with your financial goals.


Ways to Stretch Your Dollar

Meal plan- Plan your meals for the week and only purchase the ingredients specifically for those meals. This will not only help you save some money, but it will also help you eat a more balanced diet and be healthier which in turn will help cut medical expenses. When you purchase the ingredients, buy enough to have just a little bit leftover so you can keep it and have it as a snack when needed. This will help you only go to the store once a week. The less you go to the store the less you will buy. 

If you must go more than once a week, make sure that you go with a plan, even if it’s only one day’s worth of meal plans. Be sure to stick to your plan and buy nothing else.

Look up and look down- Product companies pay retailers top dollar to have their product placed at eye level where they will be the first seen. These products usually are the most expensive products. Discounted items or items that are generic brands are usually much cheaper and can be found higher, or lower in the aisle. Take a few extra minutes to look in less conspicuous places for better deals. 

Get rid of costly habits- Whether it’s daily or weekly habits that cost money, kick your habit to the curb and you will be surprised at how much you can save. Whether it’s eating out, smoking, drinking, coffee/soft drink, etc… you could invest what you saved and have your money work for you. Even without investing it, if you simply saved $3 per day you would have an extra $1095 within a year.

Try growing your own food- whether in a garden in your yard, or in jars on your kitchen counter, there are a variety of options you could try. Sprouts can be grown year round in your kitchen and can add greens to your diet quite inexpensively. Homegrown fruit and vegetables are the best, so if you have the space in your backyard or in pots on your balcony, give it a try. 

Have meatless meals twice a week- Meat is usually the most expensive part of a meal. The Mayo Clinic suggests that 2 meatless meals a week will not only have a positive influence on your wallet, but it will also have a positive influence on your health as well.

Use Goodrx.com - As most of us have experienced the insane price tag of prescription medications, this resource is a must if you want to get that price down. Goodrx allows you to list what medication you need and then it will tell you the cost of that medication at all the pharmacies surrounding you. You will be amazed at the price difference between pharmacies. We had a needed prescription that had a price tag of $800/month at our normal pharmacy. I looked it up on Goodrx and discovered that a pharmacy less than 1 mile away had it listed for $86/month. We’ve used this for multiple medications and have saved (without exaggeration) tens of thousands of dollars over the years. 

By doing what you can to budget, live within your means and build an emergency fund, you will be so much better off when financial emergencies come your way, or when personal crises are exacerbated by lack of funds.

If you are looking for ways to stay within your means when expenses exceed your income, check out this article here.


If you are interested in ways to further your education and gain skills that will improve your employment prospects without breaking the bank, check out this article here. 


If you want a step by step guide to building an emergency fund check out this article here.

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