Daily Archives: September 20, 2011

Planning For Hard Times

Short term advice is difficult to give, unless you are off the cliff and flailing in the sky already.

Assuming you are not there, let’s look at some long range tough times Plan B advice.

One, of my dozens of cousins, budgets for what he made at his last job, or before his last raise, so if the income goes down, there is already a cushion.

The short term version of this is to spend last month’s income this month.

Being self-employed with a self-employed wife, I confess I have not quite figured out how to do this one.

If you have steady income, and steady expenses, this is good advice.                                                                                                                      1916 – SEATTLE UNEMPLOYMENT OFFICE

Dave Ramsey and many other financial advisers recommend an emergency fund, $1,000 cash, plus several months expenses socked away is the Ramsey way.

The tough part, for me, and many of us, is re-assessing, going back over past decisions, to see if they still make sense.

Are there any  monthly payments you can get rid of?

We dropped the cable TV last year; I have not regretted it; I would just be watching more sporting events.

Some of which I can view online.

How about getting a used car instead of another lease or car payment, when the next one is paid off?

Flexibility is the key to meeting new, and unexpected, challenges.

The less of your income that is committed to monthly payments, the more of a cushion you have for recessions, or, a depression.

And, the more money that should be available for emergencies.

The big one, of course, your house.

Some 80% of homes with second mortgages are underwater.

And if that recession never comes?

So much the better, more for college for kids, (instead of student loans, but, watch out there!) retirement, or fun stuff.

Image credit:  Seattle Municipal Archives

Seattle unemployment office 1916




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