- Be debt free. The last thing you need when a disaster hits is to already be drowning in a sea of debt. Being debt free is one of the best ways to give yourself and your family freedom.
- Have money in your pocket. Sometimes you might run into minor disasters that a bit of cold, hard cash can fix. For this reason I always carry a couple hundred in cash on me.
- Have money at home. Preferably in a safe. If you need emergency cash and the ATMs aren't working and it's a weekend, the money you have at home can tide you over whether you need food or gas or other sundries to keep you going until you can access your other cash.
- Have money in savings. Having an emergency fund of at least six month's expenses should be required for everyone. You never know when a job loss, medical crisis, or other problem will sideline you, and thus your income earning ability.
- Have good credit. Having access to credit--by way of credit cards, signature loans, or other kinds of loans (not the crappy PayDay type loans though)--is yet another part of your financial back up plan.
- Have multiple income sources. Even if you have a good job, you never know when it might end without warning. Having multiple sources of income is a great way to spread out the risk and always ensure you have money coming in.
- Have insurance. You need life (maybe), health (definitely), home (probably) and auto (if you own an auto) insurance in order to protect your biggest assets from a court judgement in the event that you find yourself dead. sick. robbed, or in a car accident.
- Have investments. The best way to create an additional source of income is to have investments. This way your money works for you even when you are sleeping. Investments allow you to save, tax free, for retirement as well as allow you to invest in such a way as to draw dividends, or develop assets that can later be sold (such as real estate).
- Which brings us to assets. If you are going to spend your money anyway, you might as well buy things (assets) that either hold their value or appreciate in value. The latest cell phone is not an asset. The price drops as soon as you buy it and after a few years it will be worth nothing. Buying a house, however, is almost always an asset (meaning it grows in value while you own it). Buying a brand new car isn't an asset (the value drops immediately as soon as you drive it off the lot), however buying a good used car which will hold its value plus give you transportation can be a good investment. Other items that hold their value: guns, gold, tools. The food you have stockpiled can be seen as an investment, your education can (in come case) be considered an investment, and the tools you use to earn money can also be considered investments.
Your goal with this challenge is to ensure your financial fitness now and into the future. When a disaster like Hurricane Katrina hits you don't want to be the one begging for help on the national news simple because you didn't have the money and assets to see yourself relocated until the disaster has passed. Job loss, a tornado, a lengthy illness and other personal disasters can be easily mitigated if you have the forethought to set yourself up financially ASAP.