Are You Prepared?

The world has hit the breaks. Everyone is concerned about jobs. Everyone watches the numbers. How many people became unemployed this month? There seems to be a revolution back to saving. The question is: How much is enough?

In the 1980s people always recommended that you have 3 to 6 months of expenses in savings. That was then. This is now. Jobs with high-incomes are going away. Business is reducing incomes of those who stay employed. It takes longer now to get a new job that replaces your income (if you can do it at all).

The best advice we can give you is this. If you have not begun to save money with each individual paycheck you receive, start today. We recommend that you work to build 15 to 18 months of expenses in savings. That will help you eliminate panick and it may also help you shoulder the downturn in the economy that may make it much more difficult for you to replace your income.

Businesses are putting themselves on “reduction.” All across the country employers are asking workers to take 5 – 10 – 15% reductions in income. You should focus on your spending in the same fashion before the “great recession” (as some are calling it) hits your household.

How do you reduce your spending by 5 – 10 – 15%? The same way businesses do. You look at every bill you have today. You look at wants Vs needs. You take a look at insurance deductables. You take a look at credit cards (see our information on seeking interest rate reductions or eliminations with credit card companies). Whatever you do to reduce your spending, take the amount you reduced and put that in savings.

If you work to reduce spending by as much as 15% and you add automatic savings to your life, you will provide more options for your family in the future. You can do this. It is a matter of focusing on short, medium and long-term goals. If you don’t have goals, you should sit down and seriously look at your life and what you want from life. You should have short-term, medium and long-term goals.

Good luck. Making savings a bigger part of your life and reducing debt will give you more strength to face whatever comes. If the bad times don’t come to your house, you will be building wealth. If bad times do come, you will be more prepared.

Loyd Ford


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