I t has been a big wake up call for me, that the PTBs talking about simply cutting off entitlements. Intellectually I knew it could happen but it is quite different when they come out and say it. I based my financial preparations on the idea that my “entitlements” could be cut up to 30%. Through inflation or a cut at the PTBs level. Completely cutting off all cash flow to me was not something I thought I would have to face yet. While I have taken steps to protect myself for a few months, I am unable to pay off my house quickly and becoming a refugee of any sort is not on my to do list! I know many people believe that cutting entitlements is a bluff and it is, but sooner or later you will get called and that could get very ugly very fast as we saw with the EBT debacle.
I know for myself the fastest way to get money was to start saving it. Prioritizing your spending and paying for the basics first, then looking at things you don’t need or get much value is next. Getting rid of and staying out of debt is a huge thing and it is all to easy to slip back into debt and interest payments. If you start or only make min. payments on your debt you may be in trouble and I know I’m catching myself thinking that if I can make the min. payment I’m okay, at best I’m only okay for month. I have played this game before and lost with debt. I should know better, but it shows how easy the “debt monster” can sneak up on you even if you are aware of it.
For 2014 the goals will focus on cutting the strings of the PTBs that make me dependent on the government and then trying out different home based/ cottage type industries that generate some positive cash flow. Get that wood stove loan paid off as quickly as possible and build a good “emergency fund”. Simple things but not always easy. I think the wood stove and solar panels will payback quickly but I find myself wanting to make just the min. payment rather than retiring the debt as quickly as possible.
I think I can make up my shift in spending fairly quickly and get back on track for clearing the debt I have incurred the last couple of months. I might be beating myself up a bit more than is called for as the last few weeks have been extraordinary. We may face another “shutdown” in 3-4 months and I don’t see anything that makes me think that the economy will come roaring back to life. 2014 is going to be an “interesting” year in the Chinese sense of the word!