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Prepping is all about gaining the ability to live a self-sufficient lifestyle. The prepper is ready to survive and thrive outside of the constraints of mainstream, modern society. It doesn’t matter if the prepper’s need for self-sufficiency comes from a broad economic collapse, change in government policies, or a more personal reason. The prepper is prepared to live without dependency on society.

Having the gear and a plan to live outside of the city or find your own food supply is essential. But it’s easy to forget one of the most basic parts of financial prepping. In addition to savings and some U.S. dollar alternatives like gold, getting out of debt is crucial to prepare for self-sufficiency.

Why should you prioritize getting out of debt?

Debt enslaves. When you owe money, you are beholden to whomever you owe it to. So long as you owe that money, you are legally obligated to work for the sake of paying it back. Most of us have little choice but to accept some amount of debt, such as for a mortgage or vehicle loan. We all need a place to live and a way to get around, though getting rid of even these debts should be a long-term goal of any prepper.

Other types of debt, such as credit cards, payday loans, and title loans are a recipe for total dependency. They require massive interest payments that choke your ability to save for the future. Debt begets debt. Because you pay so much interest, you find yourself short of money. That results in more borrowing. This, amongst other economic forces, is a significant reason that so many Americans live paycheck to paycheck, making solid prepping and self-sufficiency difficult to impossible.

Getting out of debt: The snowball method

This method starts you on the way to paying off debt and continues accelerating it, like a snowball growing bigger as it rolls downhill. Rule #1: No new debt. To use the snowball method, start by listing all of your credit card, home loans, car payments, and other debt. Start with the smallest debt and end with the largest. Figure out which ones you need to get rid of first, many times this can be done by simply tabulating your minimum monthly payments and then paying that consistently. You can also refinance your home loan to something with a lower interest rate, like a VA loan, or by using your home equity.

Here is where the discipline comes in. As you pay down the debt and your minimum payments decrease, continue paying the same amount. Take the money above the new minimum payments and apply it to the smallest balance until it is paid off. Then apply the “extra” money to the next smallest balance. Repeat until all debts on the list are paid. It also helps to contribute and additional money you can spare to the effort.

Credit-card companies rely on interest rates snowballing to keep you in debt. The snowball method reverses the trend of indebtedness. By applying it faithfully, you can become debt free.

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Dave Ramsey
VA Home Loans
Money Crashers