Tuesday, March 3, 2009

An Alternative To Help Us Get Prepared...

We have been counseled by our prophets to avoid unnecessary debt. As we watch what is happening in our economy, we hopefully are realizing the wisdom of that counsel. Many people have thousands of dollars in unnecessary debt for things like boats, toy haulers (and the toys inside of them), etc. I see people on Craigslist every day trying to sell their $35,000 toy haulers (that now are worth about $20,000, but they still owe the $35K), their $60,000 boats (now worth half), etc. Clearly unnecessary debts they piled up for the sake of luxury and fun.

But what about going into a very small amount of debt, say less than $2,000, for your year's supply? Is that such a bad idea?

We have been counseled to have a year's supply - not just to do the bare minimum of getting a bunch of unusable commodities so we can say we have complied. We are to actually be prepared to live on our year's supply. Many people believe they cannot afford to get a year's supply. I have preached about the invalid nature of this excuse in previous posts, so I won't discuss that here.

But let me ask a question: if you had to choose, which counsel would you rather follow, to avoid debt and have no year's supply, or to use a little bit of debt and get that year's supply? This is an interesting conflict, but I would opt for having the year's supply. I believe it would be better to pay for a little bit of debt and know that my family was provided for, rather than be vulnerable to the times to come (and they are coming) when we will need the provisions.

Let's look at the pros and cons. If you incur a small debt to be prepared, you pay a little bit of interest. If you can't pay the bill, your credit rating might suffer a little bit, but the bank won't repossess your year's supply. You are still prepared.

If you don't incur the debt, you have no financial risk, and your credit rating is protected. But if a drought or a war or something else comes along that requires us to live on what we have, you and your family cannot survive on your credit rating.

If you truly cannot afford to part with the cash to get a year's supply (you don't have cable, high-speed internet, or cell phone bills you can cut, or other luxuries that can be sacrificed), maybe you have a credit card that can be tapped into for a small amount. Doesn't it make sense to have the protection for your and your family rather than not to have it? Which is really the lesser of two evils - debt or unpreparedness? It's worth thinking about.

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