Welcome to another episode of the Be Prepared Channel. Today we are going to start talking about austerity. If you follow the news you might get visions of rioting in the streets in Europe as they implement austerity measures. We are not talking about the criminal banking and government sellout type austerity. While amusing, interesting, or horrifying... Maybe all 3! It isn't the center of focus here at this time. We are going to talk about making investments in yourself and your family to help with the tough times that you might be experiencing right now, or as we all know there are some very rough times ahead. Why do I say that? Massive US government debts, massive deficits, states and cities are bankrupt, and as we all hear and can see the financial system is global and their bad bets and leveraged risky schemes have endangered the entire globe. So while the stock market has been on a run since 2008 when this house of cards started to collapse, anyone paying attention knows that the Federal Reserve and the big banks and investment houses are pumping funny money into the system to do several things. One to help them earn profits to help sure up some of the bad bets they made, and to provide the psychological mental lobotomy that the marketplace needs to keep this party going as long as possible as the money changers look for a way out of their fractional reserve banking nightmare. Now that I have gotten that off my chest you are probably asking... What the heck is this post about? LOL, I am glad you stuck with me through that rant and lets dive into the topic at hand.
Inflation, Inflation, Inflation
By now you probably have noticed that the Federal Reserve and the funny money crowd are very intent on trying to print their way out of this financial mess. This means more and more dollars flooding the system. Luckily for you and me most of the funny money has been going into the pockets of the banks to sure up massively bad debts on their books(ie into a black hole) and not showing up on the streets where you and I live. Otherwise the inflation rate would be astronomical. Unfortunately this will not be the case forever, or possibly not for much longer. This means our buying power for everything is going to drop significantly. Sadly we all know wages are not going to keep pace as they already don't keep pace in the world of under reported inflation already in the system. This means that in order to deal with this we either need to suddenly make more money, or we need to find a way to diminish the impacts of this inflation.
The govt when it reports inflation numbers these days of course loves to twist the truth by omitting data that fluctuates a great deal, or frankly just makes them look bad. For example food and energy are omitted from the inflation numbers. Now the last time I checked the largest portions of my budget and probably yours are going into these two categories. It is pretty difficult to omit our purchases of these things from our daily lives like the govt does these figures. Sadly the largest price swings and where we are most likely to be hit the hardest is going to be in these categories.
Now don't get me wrong, inflation is a factor across the spectrum of goods in the marketplace, but most other categories of goods falls more generally into discretionary spending, but of course there will be things in the "discretionary" areas that we will want to look at investing in as well. This post is going to focus on the overview of this topic on austerity. We will touch on the general areas that will be of interest as we try to find ways to counter the tsunami of bad things coming our way in our economy.
The categories we will be discussing:
4. Discretionary Goods
We will try to touch on each of these areas to a degree that will possibly help you with finding ways that you can invest in yourself today that will deflect some of the blow coming our way. Action today could ease your financial burden as job losses, bad economy, and inflation become the daily reality we are facing.
What do we hope to accomplish?
The idea we are touching on is the concept that investments in our "infrastructure" today can save us a lot of money going forward. Money that we may not have due to job losses, or inflation has so robbed from our budgets that we cannot afford to make these investments going forward. So the time to plan and act is while we still have the means to try and tackle as many of these issues as we can. By leveraging dollars that still have some buying power today you may be able to invest in things that will frankly be completely out of reach as costs skyrocket. Particularly in the areas of the essentials of food, water, and energy.
Our austerity today will fall into the categories of finding money you didn't know you have or is being spent on less productive things. Some areas we can focus on in the area of personal austerity measures to free up money to help fund these other investments might fall into areas of personal and discretionary spending that can be curtailed while working on these crucial investments.
Reduce energy consumption today
- When going out in your car/truck try to combine trips so that your making as few trips as possible.
- Practice your hypermiling techniques. I posted a series on this previously, but it can't hurt for us to review some of those techniques again.
- Turn down that thermostat when heating, and turn up that thermostat when cooling. Bundle up and save yourself some money.
- When it gets warm enough that your feeling uncomfortable use a fan instead of the AC!
- Remember to turn off those lights when you leave a room. Only have the lights on when you actually need them. Open up the curtains and let some light in when you need light!
- Anything that has a remote control or a clock in it uses electricity all the time, even when it is powered off. Unplug these things.
- Remember to turn things off when not being used.
Reduce water consumption
- When doing dishes by hand fill only a small tub of water and for your washing, and wait until most of your dishes are done before running your water to rinse.
- When using your dishwasher save water by avoiding the rinse before washing them. Scrape as much food off your plates and pans as possible(into your compost bin of course!). Then let the machine do the job from there.
- Watch the timing of your showers. Reducing the time in the shower will reduce your water and water heating needs.
- Toilet flushing... I know ewwwwww, but let's try to keep this one simple... It's mellow if it's yellow, but if it is brown, flush it down. Reducing how often we flush can save a lot of water.
- Brushing teeth or washing up only turn on the water when you need it. In other words don't just let it run.
- When running sprinklers or irrigation try to time how long your running these to minimize waster use.
Food cost reduction:
- Buy only what you know you will eat
- Cook what you know will be consumed at a meal so as to avoid waste.
- Leftovers is NOT a 4 letter word. After the meal if there is anything left that could be served up for a lunch or two then put it in some containers and toss it in the fridge!
- Remember to look in the fridge for leftovers and eat those before preparing something else.
- Stop eating out! Your meals are healthier and cost less by cooking at home.
- Prepare food in advance and put it in the freezer or fridge for quick access to food in a rush and for lunches. This eliminates the excuse that you didn't have time during your weekly grind to prepare something. Spend an hour or two on the weekend to cook up things in advance. It will save you money and time throughout the week.
- Clip those coupons and save more on your groceries.
Wasteful discretionary spending:
- When your about to buy something ask yourself, "Do I NEED this?", "What would I do if I didn't buy this?"
- Avoid shopping when your hungry!
- Make a priorities list and lay out things that you know are important to your austerity goals of reducing your ongoing expenses and prioritize your purchases based on your priorities list.
- Take some time to think about your purchase, if you see something and think about buying it tell yourself to wait until the next time. If by the time you come back to the store the next time you still find that you need that item then maybe it is a useful purchase... Think of it as a waiting period so you can let the "idea" cool off.
- Try to avoid paying full price for anything.
- Comparison shop for those items
- Learn to use tools like ebay.com, froogle.com, amazon.com and other comparison shopping engines to help you find the best deals on the items you need.
- Avoid temptation! A person has no desire to buy things of which they have no knowledge of! So stop torturing yourself, avoid the stores unless you know something you specifically need. - - When you go into the stores, no sight seeing! Just go in there and get specifically what you came in there for. In, and out! Save yourself the temptation, and money.
- No buying junk at the cash register "last temptation" racks!
These are just things you can do today with no money out of your pocket. The next installments will focus on investments and changes you can make that will make this easier and less costly. Investing in infrastructure changes could be the key to long term reductions in costs. In most of these areas your not going to get some big savings in one area in most cases. What you will typically see is reductions in each area that will add up to be a significant reduction in costs to you each month.
Your money is still worth something today... Relatively speaking. In some areas at the moment there is actually what is probably going to be reflected on as a short term lapse in pricing in the areas of renewable energy products. There are frankly too many companies, and a glut of products that are rushing in from China that have depressed prices. Now may be one of those short term opportunities to buy these products at very reasonable prices. Make hay while the sun is shining is the saying. And today it looks like we have an opportunity to do just that at bargain prices.
As the cost of essentials rises with inflation the pinch on our budgets is going to be felt pretty sharply. If we take the steps needed now we can be prepared for this and possibly even benefit to some degree.
Other areas are not experiencing low prices today, but we know that if we don't sacrifice today we won't be able to afford them in the future when the cost even in todays dollars are high. Such as water, water storage, or alternative means to get at your water in the case of wells. None of these ideas will be inexpensive even in todays money, so it stands to reason that going forward as water rates are pushed up and municipalities are forced to raise prices due to skyrocketing costs and debt servicing costs that water will be critical.
Why today on food? Again if your buying for a food storage plan your dollars will never go further, but possibly more importantly growing your own food requires time, energy, effort, and learned skills. If your new to gardening your in for a treat, but also in for some hard lessons as you get started and begin to look for ways to do this sustainably without relying on external inputs. In the case of planting nuts, and fruit trees and things of that sort it takes years for those trees to mature to production so getting started sooner rather than later will be key to your success.
Some of the areas we will be discussing over the next few installments will be focusing on these general areas and hopefully give you some ideas about how you can go about tackling austerity today. The idea is that by investing time, energy, money today you can see a much bigger payback in the future. This can be thought of in terms of reduction of energy bills or even eliminating energy bills, reduction in the cost of food for your family, and reductions in our use and cost of water.
By putting our time, attention, and money to work today we too can buy time much the same way the Federal Reserve and the bankers are doing today in the hopes of delaying the crisis. I don't think there are too many people that actually believe there is a way to avoid the coming correction, but we sure can pray that they are successful in continuing to delay this as long as possible. Every day they can put off the correction is yet another day that you and I can prepare. In this case as you can see some of these things that we need to do actually take some time. I can only hope it isn't too late for us to put a serious dent into this list of things to work on.
What is going on at the Be Prepared Channel?
Well we have been working on this list a little bit so far this year. I started the earthworks/water catchment terraforming of my front lawn. Much to the confusion and frustration of my neighbors. I cut on contour ditches/swales across the hill in my front lawn in the hopes that if we ever get any precipitation this year that I can divert as much of that water into these swales and retain it in the soil. I started planting some trees. So far I put in 2 semi-dwarf apple trees and have been nursing them for the last week. They seem to be happy so far. I am still digging at this point and plan to plant one or two more trees before I start filling swales with wood chips, peat moss, and compost and planting. Trying to leverage permaculture ideas as much as possible to create a microclimate. Living in a semi-arid desert environment water is crucial and key to this entire transformation. Water rates have continued to skyrocket here so finding ways to be able to reduce water consumption will be an ongoing effort this year.
We have several projects this year that I hope will make a significant dent the monthly bills. The first big project came up unexpectedly. This was the need to replace our furnace. Sadly the old one was the original from when the house was built in the early 1970's. The parts for the furnace apparently have gotten too hard to get parts so the cost was going to be unreal to potentially fix it. So I was forced to consider a new furnace. I will tell you more about this in the energy installment of this austerity series, but let me just say that the reduction in heating costs has been significant.
So with that I will end this rambling session and hope to lay out some ideas in this series that might help you to tackle some of your own costs and bills. Try not to get caught up on the trap of looking at todays costs of water, energy, food and talk yourself out of taking action because the cost of doing something appears it will take forever for it to pay for itself. Frankly most of those forecasts and repayment models won't mean much as they just fail to factor in inflation and the value of the security of being able to do as much as you can on your own. When money gets scarce, and/or it isn't worth much our ability to have taken steps to greatly reduce consumption and minimize our costs could be crucial in helping us to weather the coming storms.