The New Financial Cushion
August 11th 2009 00:34
A few weeks ago, I was in fear of losing my job. It didn't happen so now I am preparing for a 'just in case' situation. I found that was once a norm no longer applies in today's volatile market. Unemployment will soon reach double digits by year's end. This means there will be more competition out there and it pays to be prepared.
Things have changed. Rather than saving 10% of your paycheck the new norm is at least 15% but ideally 20%. Your debt should be no more than 30%, down from 36%. Once the ideal saving in case of unemployment was at least 3 months of your salary, now it is at least 6 months worth of your salary. Twelve months if you are the sole breadwinner with children.
You really need to watch and keep track of all your spending habits to see where you can cut and save. You must also find ways to supplement your income in some way and quit looking at a win fall as a new spending spree, but rather a saving spree.
When you save you feel more secure. The key is not to splurge on what you have saved. Cut backs are a must . When I thought I was going to lose my job, I started focusing on priorities and surviving. The main priorities are shelter, utilities, food, transportation, insurance, and debt. I found a lot of information on this. The key is surviving !
Food for thought until next time!
Things have changed. Rather than saving 10% of your paycheck the new norm is at least 15% but ideally 20%. Your debt should be no more than 30%, down from 36%. Once the ideal saving in case of unemployment was at least 3 months of your salary, now it is at least 6 months worth of your salary. Twelve months if you are the sole breadwinner with children.
You really need to watch and keep track of all your spending habits to see where you can cut and save. You must also find ways to supplement your income in some way and quit looking at a win fall as a new spending spree, but rather a saving spree.
When you save you feel more secure. The key is not to splurge on what you have saved. Cut backs are a must . When I thought I was going to lose my job, I started focusing on priorities and surviving. The main priorities are shelter, utilities, food, transportation, insurance, and debt. I found a lot of information on this. The key is surviving !
Food for thought until next time!
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