Due to the government shutdown on October 1, 2013, the first in 17 years, many Americans have been
forced to make adjustments to their lifestyle.
Many Americans are stubborn and refuse to make the necessary sacrifices
required to survive a government shutdown or any other economic crisis. This is not the time to go to the mall, go on
vacation or spend money. This is a time to prepare, plan and prevent.
Never depend on the government as your only source of
income. But if you do: stretch your money, develop a plan to
downsize your lifestyle to prevent future crises and earn an additional source
of income using these 3 tips:
Prepare - Spending
- Reduce spending by 30%. Create a balance budget: housing 35%, debt 15% (excluding mortgage), savings 10%, transportation 15%, and remaining expenses 25%.
- Obtain adequate insurance such as health (Obama care), life, car, homeowners or rental, disability or long-term care. Review yearly and make adjustments as needed.
- Pay off old debt. Pay down current debt. Keep credit card balances at 20% or less of the credit limit at all times.
Plan - Save
- Save 10% - 20% of your income on a monthly basis, save more when you can.
- Save money towards retirement for at least 25 – 30 years. If you started contributing late double up on contributions.
- Automate savings. Automatically contribute to a savings account where the bank far from your home or job or that is out of town to resist the temptation to tap into the account.
Prevent - Budget
- Go on a spending fast for 7, 14, 21 or 30 days every 3 months where you spend no money including credit cards.
- Only buy things you need. Everything that is on sale in not a bargain. Focus on buying more needs vs. wants. Designer clothing and bottled water are not needs.
- Set a daily or weekly spending limit. Pay for all items with cash. Use credit cards for emergencies only.
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