When I thought of the title for this blog post I had this little thrill, like, "Wow, if I can come up with something like financial fire drill, I must be really cut out for this blogging thing!" I started planning what I would do with the money when sponsors started paying to advertise on my site, and made a note that I really need to at least outline my planned cookbook.
And then I googled financial fire drill and found out that literally every financial blogger talks about them, and so do most of the frugality bloggers.
Oh well.
What most people mean when they talk about a financial fire drill (outside the investment world) is to write down a plan of how to pare back expenses if you lose your job or have a major expense that suddenly arises. Things like having a list of non-essential monthly services that you need to cancel (like Netflix and your YMCA membership), knowing in advance how to apply for student loan deferment, and having some idea of what your minimum grocery spending budget would be. A corollary to that is having an emergency fund set aside so that you can live for a period of time with minimal expenses, without racking up credit card debt or losing your home. So this "financial fire drill" is really more of a "financial fire safety plan," but in general there isn't much to implement until you actually lose your job.
That's where I come in. Because when I perform a financial fire drill, it's live, folks. There are poison gasses in the hallways, the smoke detectors are screaming, and you can't touch the bedroom doorknob because it will scorch the skin off your fingers.
Mama don't play.
Since our first bad winter, when it didn't snow enough for Ben's plowing job to provide a living, I've put the family on an austerity budget every year from the beginning of January until the end of March. What does an austerity budget mean when we already spend only $60 per week on groceries? Let me break it down for you. It means we start spending only $10 per week on groceries. I've done this, more or less, every winter for the last 5 years, and I've found it incredibly helpful in several ways.
$50 per week over the course of three months adds up to roughly $700 by the end of March, which isn't shabby, all things considered. But there are other factors. Like: if I'm not already out and about, I'm unlikely to impulse buy things at WalMart; I'm unlikely to stop at a thrift store on the way home; in short, I spend less in general when I'm spending less money and time on groceries. I'm also saving the associated gas money that I would otherwise use getting to and from stores. In addition, since I always fill out our tax return as soon as possible, we usually get our tax checks right in the heart of winter. It's super tempting to use this money on frivolous things, but if I'm still in spending lockdown, the money has a tendency to sit until it's not new anymore, and at that point I'm getting used to having $10,000 or more in the bank and never want that feeling to go away, so I'm less likely to fritter it away on tater tots and other extraneous delectables. In short, the $700 is only the beginning of what our family really saves by not spending money on groceries for three months out of the year.
When Ben was told at the beginning of this year that he was going to lose his job soon, it was a very precarious moment. We would have to move; we would have to build fences and shelters for all our animals on a new, empty property; we would have to plant our garden before we actually moved in, and start settling into a house that wasn't anywhere near finished yet. I'd only recently had our fourth child, and we were still getting used to the new shape of the family, not to mention associated expenses like having to buy a mini van to accommodate that fourth car seat.
Despite all this, there was no panic. We worked on getting the new place ready to move in. When Ben's last week of work ended and his last paycheck went into the bank, we tightened our belts and kept working. Despite the generosity of several people money kept getting tighter, for weeks, as that paycheck fell farther into the past and Ben learned to drive big trucks preparatory to earning his CDL. And in that time, we steadily consumed stockpiled food, plus fairly regular purchases of day-old bread and peanut butter and jelly, because we were busy and I didn't always have time to cook as much as I would have in the winter firedrill. But the financial tightness was nothing new to me or the family; some weeks we didn't spend a dime because there wasn't a dime to spend, but we barely missed it because I knew how to do this. That's the real value of the financial firedrill: looking at a week or a month of no income and knowing, without a doubt, "That's ok. We can do that."
So. What would a financial fire drill look like for you? Many people can't cut their spending down to $10 per week, or extend the drill for as long as three months. But even a two week drill will show you a lot about your stock of food on hand and your spending habits; doing a short drill with a certain amount of advance preparation will tell you a lot about what you need to know in order to advance to longer stints. Most people will have to buy milk during their fire drill, but how much can you get away with? If you pledge to cook all three meals from scratch every day during the fire drill your money will stretch farther. Try to write down things you wish you'd prepared for, and save your notes for then you plan your next drill. Also, consider taking the money you would normally have spent on groceries and setting it aside. If you save $50/week on groceries for three weeks (a very doable goal for most families) you'll have $150 set aside. Enough to significantly winterize your home in the fall, or buy household supplies in large quantities (paper towels, toilet paper, dish and laundry soap, cat food), thus saving money on a per-use basis and also freeing up regular weekly grocery money for weeks or months to come. A financial firedrill doesn't have to just be about the peace of mind that comes from knowing you can handle some financial stress; it can also jumpstart your savings journey now, making it easier to save even more in the future. So sit down with your family and plan your first drill today!
And then I googled financial fire drill and found out that literally every financial blogger talks about them, and so do most of the frugality bloggers.
Oh well.
What most people mean when they talk about a financial fire drill (outside the investment world) is to write down a plan of how to pare back expenses if you lose your job or have a major expense that suddenly arises. Things like having a list of non-essential monthly services that you need to cancel (like Netflix and your YMCA membership), knowing in advance how to apply for student loan deferment, and having some idea of what your minimum grocery spending budget would be. A corollary to that is having an emergency fund set aside so that you can live for a period of time with minimal expenses, without racking up credit card debt or losing your home. So this "financial fire drill" is really more of a "financial fire safety plan," but in general there isn't much to implement until you actually lose your job.
That's where I come in. Because when I perform a financial fire drill, it's live, folks. There are poison gasses in the hallways, the smoke detectors are screaming, and you can't touch the bedroom doorknob because it will scorch the skin off your fingers.
Mama don't play.
Since our first bad winter, when it didn't snow enough for Ben's plowing job to provide a living, I've put the family on an austerity budget every year from the beginning of January until the end of March. What does an austerity budget mean when we already spend only $60 per week on groceries? Let me break it down for you. It means we start spending only $10 per week on groceries. I've done this, more or less, every winter for the last 5 years, and I've found it incredibly helpful in several ways.
1. It prompts me to stockpile foods.
Nothing inspires me to buy up flour when it's on sale during the holidays like the thought that I won't be allowing myself to buy flour again for three months. Nothing motivates me to put aside cans of tuna or bags of chocolate chips like the thought that I'll really wish I'd accumulated them when February rolls around. This practice also gives me a very practical reward for the summer's work of gardening and canning: didn't can enough tomatoes? Too bad, you're going to run out of ketchup and tomato sauce and tomato soup, and you won't be able to buy supplies to replace them; that takes a lot of family favorites off the menu. Didn't keep track of the weeds in the potatoes, or water adequately during that drought? That's a shame, all the potatoes are the size of marbles now, but you'll still be scrubbing, cooking and eating them because they aren't turnips and you aren't allowed to go to the store.2. It prompts me to use what I've stockpiled.
This is actually a major problem among survivalists, canners and general stockpilers: we buy food and then don't eat it until we realize it's far too late and it has gone bad. Well, there's nothing quite like not buying groceries for a month or three to make you get resourceful in using up what's waiting in the cellar! It also makes you stop and appraise your usage. Say you bought a family pack of boneless, skinless chicken breasts at Wegmans. So you have eight of them, and you've put them in quart bags and frozen them for firedrill time. Do you thaw four chicken breasts for your family of five and make a meal of pan-seared chicken breast, potatoes and broccoli? Or do you choose to get creative and make two breasts (or even one) serve for a whole meal, perhaps by making a stir fry or paella? When those chicken breasts in the freezer have to get you all the way to March, you start rethinking your meal planning and choosing serving options that fill tummies less expensively.3. It helps me assess our needs the rest of the year.
My thoughts on what constitutes a staple have drastically changed since I started running the financial fire drill on an annual basis. Given that my $10 per week is earmarked for fresh fruits and vegetables, there's absolutely no room for dried pasta or storebought bread; I've come to realize that those things are quite readily replaced with homemade pasta, homemade bread, and also other less conventional alternatives (like stovetop flatbread and home baked pita pockets). I can also make very delicious masa tortillas for a fraction of the cost of storebought. Each winter I learn new skills, and each spring, when I start spending again, I find that there's more money to spare because I've formed new habits of cooking and eating.4. It Lets me stockpile some cash.
$50 per week over the course of three months adds up to roughly $700 by the end of March, which isn't shabby, all things considered. But there are other factors. Like: if I'm not already out and about, I'm unlikely to impulse buy things at WalMart; I'm unlikely to stop at a thrift store on the way home; in short, I spend less in general when I'm spending less money and time on groceries. I'm also saving the associated gas money that I would otherwise use getting to and from stores. In addition, since I always fill out our tax return as soon as possible, we usually get our tax checks right in the heart of winter. It's super tempting to use this money on frivolous things, but if I'm still in spending lockdown, the money has a tendency to sit until it's not new anymore, and at that point I'm getting used to having $10,000 or more in the bank and never want that feeling to go away, so I'm less likely to fritter it away on tater tots and other extraneous delectables. In short, the $700 is only the beginning of what our family really saves by not spending money on groceries for three months out of the year.
5. It acclimates me to actual financial crisis.
When Ben was told at the beginning of this year that he was going to lose his job soon, it was a very precarious moment. We would have to move; we would have to build fences and shelters for all our animals on a new, empty property; we would have to plant our garden before we actually moved in, and start settling into a house that wasn't anywhere near finished yet. I'd only recently had our fourth child, and we were still getting used to the new shape of the family, not to mention associated expenses like having to buy a mini van to accommodate that fourth car seat.
Despite all this, there was no panic. We worked on getting the new place ready to move in. When Ben's last week of work ended and his last paycheck went into the bank, we tightened our belts and kept working. Despite the generosity of several people money kept getting tighter, for weeks, as that paycheck fell farther into the past and Ben learned to drive big trucks preparatory to earning his CDL. And in that time, we steadily consumed stockpiled food, plus fairly regular purchases of day-old bread and peanut butter and jelly, because we were busy and I didn't always have time to cook as much as I would have in the winter firedrill. But the financial tightness was nothing new to me or the family; some weeks we didn't spend a dime because there wasn't a dime to spend, but we barely missed it because I knew how to do this. That's the real value of the financial firedrill: looking at a week or a month of no income and knowing, without a doubt, "That's ok. We can do that."
So. What would a financial fire drill look like for you? Many people can't cut their spending down to $10 per week, or extend the drill for as long as three months. But even a two week drill will show you a lot about your stock of food on hand and your spending habits; doing a short drill with a certain amount of advance preparation will tell you a lot about what you need to know in order to advance to longer stints. Most people will have to buy milk during their fire drill, but how much can you get away with? If you pledge to cook all three meals from scratch every day during the fire drill your money will stretch farther. Try to write down things you wish you'd prepared for, and save your notes for then you plan your next drill. Also, consider taking the money you would normally have spent on groceries and setting it aside. If you save $50/week on groceries for three weeks (a very doable goal for most families) you'll have $150 set aside. Enough to significantly winterize your home in the fall, or buy household supplies in large quantities (paper towels, toilet paper, dish and laundry soap, cat food), thus saving money on a per-use basis and also freeing up regular weekly grocery money for weeks or months to come. A financial firedrill doesn't have to just be about the peace of mind that comes from knowing you can handle some financial stress; it can also jumpstart your savings journey now, making it easier to save even more in the future. So sit down with your family and plan your first drill today!
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