Thanks for voting!You can’t always control a job loss, but there are some things you can do to prevent or at least stave off catastrophe in the event your financial situation changes. For starters, Frugal Dad suggests a little “financial fire drill” to prepare you and the family for the potential aftermath.
Everyone’s circumstances are different, but financial fire drills generally are exercises in awareness, assessment and restraint. Know your family’s monthly and annual expenses and plan accordingly, give your savings the onceover and try to stretch them to cover 6 months of living, look for potential financial “hot spots” and resist the urge to fan the financial flames with unnecessary or excessive spending. Fireproofing your financial house is all about minimizing the risk.
If both you and your spouse have full time jobs, it’s not as likely that you would both get laid off at the same time. But the difference in cash flow can affect the way you spend and save pretty profoundly. Awareness is vital when it comes to your family’s expense account, especially if you suddenly discover your salary is getting cut or you’re losing your job. So take Frugal Dad’s advice and assess your monthly needs. A little preparation could be the difference between a 1st or 3rd degree financial burn.
Tags: Expenses, Needs, Personal Finance
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Interesting article. I am sure many agree that you do need a emergency fund whether you are stuck in fire or flood. Emergency safety Funds are part of financial planning which comes under risk management. With tough times, many families faced issues because they didn’t plan for catastrophe and shave up their funds for emergency. Don’t do the mistake and start planning for emergency..
Do check out my blog on this topic as well, http://moneyreallymatters.com/content/life-saver-emergency-funds
Please never take this step in your financial planning for granted. Take my work for it.