Financial Survival: Determining Needs vs Wants

PROBLEM #24: How to Live During a Financial Survival Situation?Landon after falling in the mud

Financially speaking, emergencies will arise. For example: How do you deal with a job loss, or a medical emergency? How we respond to those emergencies can either undermine our future or set us up for success. When you have a financial emergency, you go into financial survival mode for a short time. This can cause a PROBLEM.

How do you know what bills you should pay? If you pay them all, you can’t make your emergency fund last as long. But how do you prioritize your budget items?

When my son fell face first into the mud – you can see in the picture how he responded to his “emergency”. Sometimes crying can be appropriate.

We can learn from real survival training, and apply the same principles to our financial emergencies. If you’ve ever had any survival training, you can make this connection quickly. But for the rest of us, when you’re faced with a survival situation – financial or otherwise – you have to prioritize.

Rule of 3s

The rule of 3s helps you prioritize things you need to survive. It goes like this.

  1. The majority can survive 3 minutes without air – top priority (able to breathe) – assess body injuries
  2. You can survive 3 hours without shelter in extreme weather – second priority (shelter or proper clothing)
  3. Most people can survive 3 days without water – get a clean source of water
  4. Some can survive 3 weeks without food – set up a reliable food source after the above items are taken care of.

Survival Rule of 3s

Some of you may be thinking – “There is no way I could go even 1 day without food!!” However, in an extreme situation, you will have to prioritize what you do based on your situation and what needs are currently met. For example: If you have no water, food does you no good. You’ll die in a few days without water. The point is: You need water before food. You have to obtain the things on this list in this order.

As my wife curtly pointed out, “Survival does not sound like fun”. No, no it does not. But if you want to live – you’ll do these things.

Applying the Survival Rule of 3s to your Finances

This is what we are really talking about. I hope none of you ever have to face an actual survival situation. However many more of us will face situations throughout our lives where we need to survive financially.

When you encounter a financial survival situation, you can’t continue to live the way you did before. You will have to prioritize how you spend your money. The most important things in your budget should be funded first. (If you don’t have a budget – read this first.) I’m going to list them first, and then briefly explain why they are prioritized accordingly.

  1. Food – for yourself and your family
  2. Shelter – Mortgage/Rent/Insurance
  3. Utilities – Electric/Water/Heat
  4. Transportation – Car/Gas/Insurance


Obviously without food – eventually we’ll die. In order to keep our financial survival situation from becoming an actual survival situation, I would prioritize food the highest. Kids especially need to maintain a good diet to grow and develop, and adults need regular food for nutrition and morale. Please don’t skimp on your food budget.

Certainly we could become more efficient with our food budget, but food is important. There are other areas where we can cut back to make the money last. In my opinion, this should be your number one priority.


As a second priority, stay current on your mortgage or rent. This is fairly self-explanatory. You don’t want to lose your shelter, and have to live in your car or out on the street. And pay your property taxes.

To save more money – you may have to move. This would depend on your specific situation, and how long you expect to be without your normal income. But if you can reasonably lower your mortgage or rent payment, it should at least be considered.


To keep your shelter running and comfortable – pay your electric, water, sewer bill, and whatever heating method you use as your third priority.

Notice that cable or internet are NOT on this list. Neither are cell phones or Netflix. This is because these are not necessary. They need to be cut temporarily in a financial survival situation. Or at least be very low on the priority list. Have you ever seen someone with cable/internet, but not enough money to pay the rent for the month?

Transportationold beat up car

Last on this list are the expenses necessary to keep your vehicle on the road: gas, insurance, and repairs. A car can be useful for going to interviews, doctor’s visits, or other places depending on your situation. If you have car payments – pay them here as well. Don’t place this budget item above the others items on this list.

Other Thoughts

Debt such as credit cards, student loans, or other personal loans, should not be paid until the priorities above are covered. Obviously you will have to pay these eventually, but again, these are not your priority. Other things that I would not recommending funding: dining out, vacations, and other “fun” things. Remember, “Survival does not sound like fun.”

When you encounter emergencies, you need to immediately cut your spending. Only fund the items in your budget necessary to survival. This will allow you to stretch your available money farther. And or course, work to restore the lost income and money. No one likes to think about what bad things could happen, but if you aren’t prepared . . . it could be really bad.

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