Your Financial Security
Managing Your Money
It is really sad to know that many of us are in dire financial straits, because we have failed to take simple steps to ensure financial peace at home. One very unfortunate piece of statistics is that most divorces are caused by financial issues. What if we were to give greater attention to how we manage our money? When was the last time you made a note how much money comes in and how much goes out? When was the last time you really balanced your checkbook?
I remember over a year ago the check engine light showed up on my dashboard. My first reaction was, "Not again!" and the second, "Where is the money coming from to fix this?" That job cost us $900 plus and we had to put it on a credit card. Bummer! Since then, I have learned that if I had an emergency fund, we would have been more comfortable with bill. It is never comfortable to fork out $1,000 to spend on a repair job. However, if I had the money set aside, the pain would have been less severe. Got it?
The brutal fact is, life is full of emergencies. If we do not prepare for them, everything in life that requires some big bucks, or medium size ones, will be an emergency for us. There are some simple steps to take to guard ourselves, financially at least, from life's emergencies.
Step 1: Create a Family Budget. You must know how much comes in and how much goes out. It also helps if you know where it is going. It is amazing how when we take stock of what we are spending, we discover expenses that do not make sense and can be axed. So what do we do with the waste?
Step 2: Save for the Rainy Day. Literally, it is going to rain - heavily. It may be a broken transmission, a medical expense, a broken washing machine, etc. It we start saving for that rainy day, we can avoid using a credit card to bail us out - temporarily. Yes, the credit card bailout is only temporary, because we are stuck with that bill. Depending on how we pay the bill, and whether or not another emergency comes along, we could be stuck with that bill for years.
Stept 3: Manage your Debt. After creating an emergency fund, start thinking about managing your debt. Debt creation is easy and effortless. Debt elimination is painful. It may mean giving up some things for awhile to beat back the mountain of debt. There is joy at end. "Weeping may endure for a night, but joy comes in the morning." (Psalm 30:5) That's how it is with debt. While you attack it, there is weeping - due to what you may have to sacrifice. However, when it is gone, there is pandemonium when you think of all the possibilities.
Step 4: Invest for Retirement. Debt prevents us from focusing on one important thing - retirement. Many people sit around and wait for the government to help. There is talk that Social Security will run out in a matter of years. Unfortunately, some people do not believe this. Unless the government reforms the system, Social Security as many know it, will be non-existent when many of us retire. It is time to take our lives into our own hands. Many jobs offer matching retirement benefits through a 401(k) program. Sign up today. Invest in mutual funds. Despite the gloom and doom of the financial system, some mutual funds are still performing well. Check out BlackRock - BACCX - on the stock market. By all accounts, BlackRock has not had a bad year, even with the financial melt-down. Some may say that they do not have any money to put aside. That is why you must manage your debt problems to free up some money.
Step 5: Save for College. It is imperative that we put money away for college. We can push our kids and hope that they are motivated enough to get scholarships, but the truth is, not all of them will get scholarships. What will we do then? Well, we could put them out and tell them to finance their own college education. Just kidding. We can have them work part-time and attend school part-time, but for some that will be harduous. Let us start now to put something into a college fund.
Step 5: Protect Your Income & Family. In a flash, life can disappear. If you have a spouse and children, you want to ensure that when you pass on, those who are left behind will not be put on the streets. It is time to think about some life insurance. By the way, when you shop for life insurance, run away from anyone who wants to sell you a "whole life" policy. There is nothing whole about that kind of policy. Whole life policies are meant to rip you off, but are made appealing by the offer of "savings and investments." Whole life policies put a bigger commission in the pocket of the agent. Run! Get a term life policy instead. Term policies are less expensive and your premium remains fixed. There are many good plans out there. Shop around.
I strongly believe that life is whatever we make it. If we follow the tips listed above, not necessarily in the order given, but with absolute consistency, we will ensure that there is financial peace at home.
Get to it then!