“Every job is at risk in this economy.” I was told that in an evaluation last year. As the sole bread-winner with a wife and two kids, ensuring financial security isn’t easy, but I have a simple way to make sure my family and I will be ready to weather any financial storm. My plan involves three simple steps.
1. Cut spending. Bread, meat, and cheese are less expensive than a burger and fries; yogurt and cereal are cheaper than an egg-and-cheese bagel. With a little planning, switching to brown bag breakfast and lunch can save thousands over the course of the year. Here’s the trick: Every day I will take the money that I would have spent on lunch and put it in an envelope, depositing it into a savings account every month.
2. Do it yourself. I prefer to pay people to do things I do myself but am too lazy to try. This summer, I plan to buy a lawnmower and take care of my own landscaping, saving thousands. While this specific savings is not viable for everyone, the concept is. The idea here is to look at your life. Is there anything you could be doing that you are paying someone else to do? Do it yourself and stick that cash directly into savings.
3. Save money from each pay check. The longer money sits in my checking account, the more I begin to feel like it’s mine. I worked for it; I earned it. I should get to spend it on whatever I want. And if the bills are already paid this month, it’s extra, so what’s the harm? This kind of thinking lands people in bankruptcy court. I have arranged for a set amount of every pay check to be routed directly into a savings account. I know I have this excess every month, and rather than spend it, I will be saving it. Of course, I keep a small amount to spend — I need to have some fun.
By my back-of-the-envelope calculations, I stand to save approximately 10 percent of my total salary using these techniques. This is a good start, and followed with more savings after paying-off credit cards or car loans, I’ll have a nice cushion to land on should the worst case scenario hit.
Don’t simply hope for the best. If you plan effectively for the worst, you’ll be able to keep your head above water when your job happens to be one of those “at risk.”