Do you check your savings account regularly? If you don’t, you should, if for no other reason than to see it grow.
If the economy goes south, you really don’t want to discover – too late – that you didn’t bother to save enough money! Having a savings account is absolutely essential in an uncertain economy. And let’s face it: what economy isn’t uncertain these days?
I sincerely hope that I – and many other preparedness bloggers — are 100% wrong about what may happen in the future. Who would want bad things to happen? But I do know that if something bad happens, I will have prepared for it the best way I can, instead of playing “ostrich” by ignoring all the warning signs. I suggest that you use these five tips to help you have money left over when things get bad.
1. Know what you have and how to get to it.
Everyone needs a central repository of their information – whether it be a physical notebook or a computer spreadsheet, that lists their various financial accounts. These can be bank savings accounts, CD’s, and retirement accounts, for example. If you are anything like me, you have collected a lot of accounts in different places, and it’s hard to remember where they all are, much less keep up with them all. You and at least one other person you trust should know what these accounts are and how to get into them in case bad things happen. For myself, I keep a list on a spreadsheet of my accounts, and they can all be accessed through an encrypted password program that is accessible from anywhere. My loved ones know how to get to it if I am unavailable.
2. Don’t spend so much money!
We live in a consumerist society, for sure. Everything we see encourages us to spend a lot of money. And there’s no doubt that if people were to quit spending money, the economy would suffer. But remember: you are in charge of your own personal economy, not that of the world. I have a few tricks I use to keep myself from spending too much. First of all, I don’t actively browse sales. Sales advertisements are put there for the single purpose of making people want things. Quit looking. Also, if I do realize there’s something I need or want, I make sure that I already have enough money to pay cash for it in my savings account, and then I find a way to replace that amount of money (in advance), so my savings account won’t have suffered for the purchase. Both these items actually work well to accomplish the actual goal, which is to delay and perhaps avoid, the purchase. Pay no attention to sellers who shout “it’s available today only!” The reason they say that is they know if you have time to think about it, you’ll decide not to purchase. Besides, there will always be “sales and rumors of sales.”
3. Be sure you have an emergency fund
Put this fund in a savings account, where it’s completely accessible, but just a little bit slow to access. Depending on who you believe, your savings should be in an amount to cover at least three to six months of living expenses. I look at it this way: if I have six months’ worth of living expenses in the bank, how can that be worse than only having three months’ worth? Only if you have an active need for that extra three months’ worth of savings should you consider keeping the minimum amount squirreled away. And keep it in a savings account where it is easy to get to, but not too easy. Give yourself time to think about it before you decide you have an “emergency.”
4. Find ways to increase your income
Despite the fact “there aren’t any jobs,” there are hundreds of places online that offer legitimate ways to earn money. Now, that’s not to say that there aren’t some real scoundrels out there, but if you use common sense, you’ll be fine. The most obvious suggestion I can make is: keep in mind which way the money needs to flow: FROM them, TO you. Never pay to obtain a job, or to be considered for obtaining job. Find out the exact method and timing of how you will be paid, and exactly what you are expected to do. Look independently for others who have used this employer and see what they have to say. Don’t engage with any employer who seems to be shady.
5. Pay off existing debt as soon as possible
You should start paying off your existing debt as soon as you have saved up your emergency fund. I know this is easier said than done (isn’t anything worthwhile?) but this step is very important, and it can go hand in hand with step number four. If you are busy earning money, you will not only have more money to throw toward any outstanding debt, you’ll have less time to buy things. Even if you can’t get a second job, though, do some strong budgeting (with some self-discipline) to see how you can apply at least a little bit extra every month toward your existing debt. That step, combined with a strong commitment not to add to your debt, will help you end that existing debt before you know it.
Planning ahead is essential!
Despite what “they” say, no one really knows what the future will hold. Isn’t it better to be prepared with plenty of money in the bank to see you through? Follow the five steps above, and you will quickly find yourself in a much better position to survive whatever is to come.
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