The government’s Be Ready guidance has a simple message: be ready to manage for three days in an emergency, so that support can reach the people who need it most. A checklist recommends everyone sets aside water, tinned food, a torch, a radio and some cash in case card payments or cash machines stop working.
I read it with a certain self-assuredness, because I’ve always been a bit of a prepper. My version isn’t the doomsday bunker and weapons cache. More like a deep pantry, a habit of buying two of anything that matters and backups for my backups. When Covid hit and shoppers stripped the shelves, I didn’t join the panic buying because a month of food was already in the cupboard.
Preppers have an acronym for the worst case scenario: TEOTWAWKI, or the end of the world as we know it. The Be Ready guidance is aimed at the emergencies a few levels below that, such as floods, storms, long power cuts and cyber outages that could disrupt society without heralding the apocalypse.
But most of the emergencies we’ll face across our lives hit just our household. A redundancy, a serious illness, a divorce. For the family going through one, it can feel like the end of the world while everyone else carries on as normal.
These events are common. Researchers at the University of Bristol recently found that around a quarter of people aged 25 to 55 go through one in a given year, rising to more than half over three years. Only 7% felt fully prepared for the financial impact of a major life event in the next three months.
Who comes to help also differs. In a national emergency, the state will arrive, even if you need to cope alone for a few days first. In a personal one, the safety net is thinner than many people expect.
Statutory Sick Pay is up to £123.25 a week for a maximum of 28 weeks and new Universal Credit claims come with a five-week wait. Only one worker in six in the Bristol survey saw benefits as a realistic safety net.
Of course, none of this is new and the advice to build an emergency fund has been around for decades. But the government’s Be Ready campaign is a useful prompt to bring a prepper’s mindset to the household budget.
The US military has a concept known as ‘left of bang’, which is also the title of a book by Patrick Van Horne and Jason Riley on the US Marine Corps’ Combat Hunter programme. The ‘bang’ is the moment things go wrong. Everything before it is left of bang and that is where you have the most options. For a household, the bang might be a call into HR or a shock medical diagnosis. Anything you do before is cheaper and calmer than anything you do after.
Over too many hours on prepping blogs and Reddit forums, I’ve picked up several pieces of received wisdom on prepping, and these rules can be adapted to make sure personal finances stay ‘left of bang’.
Prepare for the most likely emergency first: Experienced preppers steer beginners away from collapse scenarios or zombie outbreaks and towards illness, job loss and power cuts. The same applies to money. Losing an income or facing a large surprise bill is far more likely than a banking collapse, so plan for those first.
Two is one, one is none: If you own one of something and it breaks, you have none. In money terms, the risk is one income, one bank account, one card or one person who knows the passwords. Our household emergency fund sits in Premium Bonds and covers about eight months of spending. It’s off limits for anything except TEOOFWAWKI: the end of our financial world as we know it. Smaller shocks are funded from elsewhere, so the main pot stays intact.
Store what you eat, eat what you store: Preppers stock the food they normally eat, so a crisis doesn’t force a sudden change of diet. Size your fund the same way, from what you spend. Work out a bare-bones monthly budget now, while life is calm, and you’ll know how many months your savings will buy.
Know what you’ll do when it hits the fan: Preppers decide in advance where they’ll go and what they’ll grab. My income-loss plan is a list of the subscriptions to cancel on day one, the lenders to call, the benefits to check and the freelance work I could pick up. It took an evening to write but working it out in a panic would take far longer.
Your biggest prep is your community: One sentiment comes up again and again on prepping forums: “Your biggest prep is your community.” Money is no different. A third of workers in the Bristol study said they could turn to family or friends and people who fell into difficulty often wished they had sought help earlier. Talk to your partner about money, keep your work network warm before you need it and know where to find free debt advice.
Three days of water and tinned food is a good start but most of the emergencies we’ll face last far longer and nobody sends a convoy to the rescue. The best time to prepare for the end of your financial world is while it’s still turning.
Gary Jackson is head of editorial at FE fundinfo. The views expressed above should not be taken as investment advice.