If you cannot comfortably save enough to meet your monthly obligations, this would be a great time to begin to shrink your household finances. What expenses can you eliminate? What purchases can you delay? How can you keep more of what you earn monthly? The key is to maximize your savings potential by ridding yourself of unnecessary monthly expenses.
You might consider spreading out your trips to your stylists or having your lawn care professionals service you with a lower frequency. You might also consider getting rid of some of the services that you no longer need but haven’t made the calls to cancel. Many of these services were just conveniences but not necessities that probably feature monthly automatic billing such as singing ring tones on your cell phone or follow-me services. They may even include expanded cable/satellite channels that you don’t even watch because you are never at home. When it comes to playing financial defense every expense gets reviewed and nothing is above cancellation!
As you continue to reconstruct your finances, you will soon notice that you pay for a lot of things that you don’t feel that you now need but were too busy to address them because of your daily routines. The idea of managing your money becomes more than just collecting a paycheck and balancing a checkbook. You must dig deep and evaluate your spending objectively. How, what and why am I spending money on these items. What is the priority in my life, spending, saving, or investing? Am I willing to defer some immediate gratification to have a better tomorrow. As we have witnessed these past 3-10 years depending on how far back you want to look, corporate financial officers have no problem with letting you go if the bottom line doesn’t match their budget needs. This country is witnessing municipalities and even cities going bankrupt because the bottom line wasn’t watched close enough or because the funding they expected to be there was cut and the leadership groups had already spent the money. Remember when playing financial defense you cannot spend tomorrow’s money today. Tomorrow’s money is not promised and the circumstances that will be connected to tomorrow’s money cannot be foreseen. You must plan for tomorrow using the funding that you have right now.
Additionally, you should protect your household from problems that you expect to happen one day but cannot predict exactly when it will happen. For example, what happens if your air conditioner, vehicle, and a medical emergency all happen in one year? Can your financial household withstand such a storm? Are you prepared and is there anything that you can be doing differently to ensure that you can withstand some emergencies.
In the next installment, we will take a closer look at contingency planning. If you enjoyed this article, be sure to click subscribe above to be informed of the next article. You can follow Osiola on Twitter or email him at email@example.com.