survival skills starting a fire with wood

Create a survival budget for the future, but not that kind of shelter, eating canned food kind of future. We mean plan for your financial future, in the event that your circumstances take a brief turn for the words.

“Life has its ups and downs,” they say. All you can do is hope for the best, and plan for the worst.

A sudden drop in income can create havoc in any household. How will we make do? What if we can’t do this or that? That’s why there’s a need to plan ahead, to prevent the financial shock of being jobless or ill. Your plan B allows you peace of mind. This style of financial planning is actually a great way to save money, too.

Continue reading to learn how to create a survival budget for the future.

An effective financial backup plan includes these 4 elements:

  1. debt elimination
  2. an emergency fund
  3. a survival budget; and
  4. practice


Eliminate consumer debt

The last thing you want, when times are tough, are creditors knocking down your door. You want to look forward to the future, not deal with past spending.

So build future security now by reducing or eliminating unnecessary debt.

Build an emergency fund

An emergency fund is a stash of cash specifically put away for job loss and other financial calamities. It’s your hot bath and warm milk at night: it helps you sleep soundly.

The best way to build your emergency fund is to pay yourself first – prioritise and automate your savings a little each payday.

If you have a mortgage, get savvy when building your savings and use an offset or redraw account to reduce debt and build an emergency fund at the same time.

Create a survival budget

A survival budget will give you an idea of your minimum expenses to get by and how much income you need to cover them.

If you’re a two-income family, maybe you’ll find you can survive on a single income. It might not be ideal, but it will give you peace of mind.

It will also give you a target for your emergency fund. Based on your survival budget, how much do you need to save to cover 3 – 6 months of expenses?

Let’s find out.

1.Your current budget

You already have a budget and know where your money is going every payday, so making a survival budget is just a matter of cut, cut, cutting away the fat.

Wait, stop! You don’t have a budget?

Then your first step is to know how you spend your money now while times are good.

2. Readjust your income

The next step is to work out your survival income.

  • Is your partner still earning income?
  • Were you paid out your leave entitlements? How long can you stretch these?
  • Were you given a redundancy package?
  • How many weeks can you make your emergency fund last?
  • Are you eligible for unemployment benefits?

If you’ve been retrenched for any reason, make sure you’re paid out all of your leave entitlements, your super and any redundancy payments as offered by your employer.

Also, consider visiting Centrelink to discuss options and unemployment benefits. While small, these can help you meet your expenses while you’re looking for more work. Depending on your circumstances, there may be a waiting period before you are eligible for payment, so it’s a good idea to consider your options as soon as possible.

3. Eliminate Discretionary Spending

It’s time to get ruthless and slash all unnecessary expenses.

These expenses are wants as opposed to needs. Needs include food and shelter. Everything else can be cut.

And it’s amazing what ‘essential’ expenses can be eliminated when there’s just no money to pay them.

When I looked at our budget when I was first out of work, I thought we couldn’t cut much at all. A few weeks later and we were living on a fraction of what we had been.

So go through all your subscriptions and memberships and cut these from your survival budget. Cut dining out, new clothes, entertainment, alcohol and any other discretionary spending. And remember, it’s only a temporary measure.

4. Negotiate Fixed Expenses

Fixed expenses aren’t always as fixed as we think – it’s possible to reduce fixed expenses like insurance or utilities by shopping around.

If you have debts, then it’s a good idea to contact your creditors and discuss repayment options while you get back on your feet.

You may be able to negotiate a reduced repayment schedule or repayment holiday on your mortgage.

If you are struggling with debt or your creditors won’t negotiate, there are free debt counselling services that can help you.

5. Adjust Flexible Expenses

Flexible expenses include expenses like petrol, groceries and internet and to some extent utilities like electricity.

When you’re creating a survival budget, think about the bare minimum you need to get by. Budget for enough petrol to drive to essential places, enough grocery money for basic groceries and switch to the minimum internet available (or if you can, temporarily opt for free wi-fi public hotspots).


Living on your survival budget when you don’t have to, even if it’s just for a few weeks or a month has several benefits.

First, practising empowers you. Rather than worrying about the worst, you are empowered by knowing you can cope. And if you do struggle, it can be the motivation you need to reduce debts, build savings and examine alternative income streams.

Practicing for just a little while will also help you to pay off current debts and build your emergency fund.

Create a survival budget now while times are good. If you have a drop in income in the future, you’ll be glad you did, because the transition will be less stressful. A survival budget gives you the confidence you can cope and get back on your feet.

Pretty Penny Loans is here to help you get out of a financial bind by providing same-day loan cash advances up to $500.

Our application process is quick and easy. Find out how it works here.

Unlike many other money lenders, Pretty Penny Loans gives consideration to each and every application we receive, giving everyone the benefit of a fair opportunity, no matter your personal circumstances.

Read more about same-day loans in our previous blog post: Common Reasons For Fast Cash Loans in NZ

Read original source article here.

Leave a Reply

Your email address will not be published. Required fields are marked *