No Bailout For You

 This is not a political blog, or anything close to it. If you’re hoping for a yes or no stance on the proposed historic bailout plan, I’m sure there are a plethora of sites willing to oblige you elsewhere. But, while Wall Street may be convinced they’ve found their saviors, in your personal moments of financial crisis you will probably not be so lucky. This means that we must take responsibility for our financial decisions (gasp!) and carefully plan ahead to establish a backup for our own “meltdowns.”

There is no bailout for you and no one knows for sure what’s around the corner. But it never hurts to hope for the best does it? Of course not… unless that means you neglect planning for the worst. Here are a few tips for setting up a financial bufferagainst rough times.

1. Save (For) Yourself

This one is a tough one. Set aside a percentage of your income and don’t touch it. If it is too difficult for you to manage it in your checking account, then lock it in a box somewhere. You will be amazed at just how quickly even a small percentage adds up. For example, if I’m payed $200 every two weeks and I save %20, then in a month I have saved $80. Not exactly a whopper amount, true. But in six months, if I’ve held to my goal, then when Grandpa isn’t doing well 300 miles away, my unexpected but necessary visit is completely covered financially without jeopardizing my bill paying ability. True, not everyone can afford twenty percent. But even one percent is better than no percent. Not everybody can do everything. But everyone can do something.

2. Be Thrifty- Even During Good Times

Many of the famous are rich. Not all the rich are famous. Chances are good that you have met a millionaire and didn’t even know it. That’s because they didn’t get rich by spending what they had on a Hummer. They were frugal. Every financial move they made was calculated and thoroughly weighed. Vacations were planned and budgeted into a savings program, often like the one I listed above. Anyone who wants to gain control of their finances needs to get over their aversion to lower priced goods. A few years after the discount stores you may find yourself in the front row of the Milan Fashion Scene. But until then, abandon the image you get when you think of a wealthy person. Most of them still spend time shopping for the best deal. So be like the millionaire next door: clip some coupons and save! Then take those savings and stow them away somewhere like I mentioned. It’s impressive how much accumulates.

3. Find Smart People to Help

This one is usually met with some resistance by people I know. The idea of a financial planner messing with their money is not something most people like to think about. But here’s the facts of the matter. Most people wonder where their money went. A financial planner knows. Most people question whether they can afford that second car. Their financial planner can give them a definite answer. Most people wonder how to make ends meet. A financial planner knows exactly how to make your money grow enough to support your fondest dreams and more. As I listed in a previous post, make sure you get a competent financial planner who knows what they are doing. Shop around and find the right fit for you and your situation.

In unforeseen circumstances, you are your only bailout option. With some effort and some planning, you can see to it that you have a big enough bailing bucket to make it through the storm.

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