5 Ways to Financially Prepare for the Worse… Ms. Bels Tuesday, February 25, 2014 The Receipt, Your Money and You Photo courtesy of www.everydayhealth.com Statistics has shown that most Americans take their financial situation for granted. This can be true for non-American individuals as well. Of course, your geographical location may play a part. But, a financial crisis can affect anyone, anywhere, and at anytime. And, statistics say that none of us are prepared to handle them. According to these statistics, Americans (in particular) have difficulty with being “proactive” when it comes to financial preparedness. 46% of Americans have less than $10,000 saved for retirement. 40% of baby boomers now plan to work until they die. 87% of adults say they are not confident about having money for a comfortable retirement. 36% of Americans say they don’t contribute anything at all to their savings. Okay. As you can see, these statistics are shameful. We are clearly not prepared if changes occur in various stages in our lives. But, what are these “changes”? And, what should a person do in order for them to become better prepared? 1. Your kids college careers – Keep a timeline of when your child will graduate from high school. Map out a yearly plan on how much you’d like to save towards their education. Start saving now, not tomorrow. Also, research and apply for college grants or other forms of financial assistance. 2. Loss of job – Always have 6 to 12 months of emergency funds stashed in a savings account. The amount should be based on your total monthly expenses (or how much it cost to maintain your household each month). This will prepare you for any unfortunate layoff’s or separations. If you are a small business owner, devise an escape plan or ways to keep your business afloat, in case difficulties arise. 3. Economic downfall – Think of ways to survive an economic shift. What jobs are you capable of doing that can help you earn money while enduring an economic crisis? 4. Real estate or stock market changes – Stock markets fluctuate all the time. The real estate game is just now seeing a favorable shift after being the cause of America’s economic crisis a few years back. So, to prepare yourself, create a secondary plan that will keep you afloat in case your investments take a huge dip. 5. Other circumstances (i.e. divorce, health scare, death) – Be proactive by, again, writing out a P.O.A. aka Plan Of Action. Don’t wait until a parent dies or you get a divorce. Create a list of “what if’s”. These questions will help you pinpoint which income stream(s) will serve as the monetary source for any potential life change. Also, your list of “what if’s” should include names, places, and estimated costs. The earlier you plan, the better off you will be when the unfortunate time comes. This process may take a little of your inner psychic. It’s all about being prepared for anything. Therefore, a proactive thinker should incorporate “sudden changes” into their budgets. Take control of your life while you still have time. Source for Statistics: TonyRobbins.com