Get Prepared

preparing for uncertainty in the oilfieldI think each one of us is watching oil prices as they dip lower.  The average American is excited about the low price at the pump.  Oilfield families know that low prices at the pump could mean job loss.  What scares me even more is that if the oilfield slows down, the US economy will suffer tremendously.

We are cautious to say the least.  Only time will tell if this is a blip or the beginning of a big slowdown.  In our household, we are tightening the hatches.  It is not a time to freak out.  It is NOT the time to bury your head in the sand and pretend that we will all make crazy oilfield money until the end of our time on earth.  It is a time to be prepared.

Many years ago, in Oilman’s pre-oil days he lost his job.  We had no savings.  We had every type of debt you can imagine.  I had a panic attack.  We couldn’t count on my income alone at the time.  We vowed to never put ourselves in that situation again and got involved with the Dave Ramsey program.  It changed our lives.  This spring, I will co-teach “Financial Peace University” with my dad at our church.  Financial Peace University is Dave’s class on how to better manage your finances.  If you really want to be prepared for uncertainty in oilfield it is time to get a firm grasp of your finances.  For more in depth information visit www.DaveRamsey.com or buy “The Total Money Makeover”.

Here is what we have learned after paying off over $100,000 in debt (cars, student loans, credit cards, and lines of credit) and getting our finances in order.

  1. Create a budget.  Money comes into our checking account and then it goes out.  Do you know where that money is going?  Do you know how much your household expenses are?  Do you have a firm grasp on your families spending?  Create a budget and stick with it.

  2. Build up your savings.  If you or your significant other loses a job, do you have savings in place?  How about if your HVAC needs replacing or your car breaks down?  Maybe you are like me and accidentally back into your garage door when it is halfway up.  Oilman was sooooo happy with me in that moment, as the garage door hung at a weird uneven angle.  OOPS.  Things like this happen and they happen often.  Do you have cash stored away for these types of events?  If your oilman loses his job, would you be able to survive for a few months with no income?  A good goal is 3-6 months of reserves in savings.

  3. Avoid debt.  Maybe you just read number two and thought, but I use credit cards for emergencies.  I did as well.  I used them heavily when my income decreased by 60% due to the recession.  What started out as a reasonable amount of credit card debt quickly turned into a huge scary monster.  I wondered if I would ever be able to pay it off.  It took a long time and a lot of hard work.  I know some people use credit cards for the points and pay them off every month.  If that works for you, great.  For me, it is too much of a temptation to overspend.  After working so hard to pay off credit cards, I have zero desire to use again.  Having debt can cause several issues.  One, it can signify that you are spending more than you can afford.  It is too easy to spend more than you should on credit.  The second problem with having debt is that you are wasting a lot of money on interest.  Imagine if you didn’t have to pay all of those payments each month?  What else could you do with that money?  You could build your savings.  Invest in your retirement or college fund.  Your family could take a trip.  What happens if your oilman is out of work for a few months?  All of those payments seem so manageable until your income goes down.  Having credit card debt and car loans can quickly eat up savings should something happen to your income.

Oilman and I have sat down and are preparing our financial goals for the coming year.  We are keeping a close eye on oil prices.  The difference between now and a few years back is that I can be at peace over the situation.  We can’t control the oil prices, but we can get a handle on our money.  We can have savings in place and a plan for when (not IF) unexpected things in life happen.  For more information on detailed plans for you and your family visit www.DaveRamsey.com or read “The Total Money Makeover”.

About LC

Howdy! LC and her Oilman live in the ‘burbs north of Austin, TX. She is a real estate broker, but you won’t find her face on a bus bench and she doesn't drive a Cadillac. Oilman works in Texas as a Completions Consultant. Don’t worry, most people don’t know what that title means either. LC calls him frac guru, for short. She may be the only woman in America that hated both "Twilight" AND "50 Shades of Grey". Oilman and LC like wine, good music, their two dogs, and cervezas in Central America. Follow the adventures of LC and Oilman at: www.LivingOilfieldLife.com or on Instagram at: living_oilfield_life

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