Conducting A Financial Fire Drill And Living It

Thursday, May 17, 2012, AM | 3 Comments

You know, we all dream, dream about something. Most of us dream about winning a lottery to become financially independent. We seldom think about working harder and smarter for money. But, there are ways to make money through your instinctive smartness which everyone possesses, being a member of the human species.

The old adage “A penny saved is a penny earned” held true yesterday, holds true today and will hold true tomorrow.

You have to change your mindset and be a saver than a free spender and I emphasize the words free spender. We have to spend. There is no question about that. But spending wisely is the essence of saving.

make-your-kid-a-millionaireSurvey after survey shows that people are increasingly more concerned about rapidly rising unemployment rate and the fear of a sudden loss of income.

They used to be, instead, concerned more about natural disaster or the long illness of a close relative.

Come to think of it, relatively speaking, these days

  • It is highly likely to lose your job,
  • It is highly unlikely to face a natural calamity.

It’s like going to the dentist

The financial fire drill, step-by-step, is like going to the dentist. If you have flossed – once a day – and brushed – twice a day – regularly, then going to the dentist should be a breeze and not something to dread upon.

Spend wisely

Whether you have a job or not, spend wisely. First take care of your needs. You have to eat but be frugal about it. Don’t be wasteful and be economical. No need to buy $10 a pound salmon or shrimp when you can safely buy chicken.

Be discrete about spending. Spend on something that you really need. There are people who shop for the sake of shopping. I say it is showing off.

You are a true friend to someone by how well you communicate with them and how well you treat them. That’s how you can impress someone. Very few people get impressed by how much you spend in the mall.

Spend wisely on eating out, vacations, household utilities and the like.
You can get into debt so easily by not realizing how much you spend on daily things, and unnecessarily I might add.

Raise your savings level

When you spend wisely, you save automatically. They are both mutually exclusive. On goes up, the other must come down. It is wise, then, to keep your savings at higher level and your spending at a lower level.

Adjust your asset allocation

If you turn to your savings, experts suggest adjusting your asset allocation so that your investments are much more conservative. After all, you don’t want your mutual funds plummeting while you are also out of work.

Save your retirement – instead borrow

If you have lost your job and you are about to deplete your savings account, don’t think about spending from your 401(k) and your IRA accounts.

Instead you can borrow but borrow at a minimum to last you till you are back on your feet.

Use credit card to pay for expenses than using cash. That way you get money free for 3-4 weeks. But make sure to return it back to whomever owns the money.

As always, if you want to be on a path of financial success:

In a Nutshell
Do think about the fact that your financial situation can change really quickly. It has, may be not for you for now, changed for the worse the last couple of years.

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  1. 3 Responses to “Conducting A Financial Fire Drill And Living It”

  2. By Garden Seed on May 18, 2012, 9:55 am | Reply

    I was very pleased to find this site. I wanted to thank you for this great read!! I definitely enjoying every little bit of it and I have you bookmarked to check out new stuff you post. Big thanks for the useful info……

  3. By Brian Smyth on May 21, 2012, 7:18 am | Reply

    I was fortunate enough to read books on accumulating wealth and learning from my superiors that wealth is long process of good financial management. Unfortunately looking for that lottery win or becoming famous take centre stage these days for the lazy majority.

    Debt Arrangement Scheme

  4. By Tracey on Jan 22, 2016, 6:36 pm | Reply

    These are great financial tips that I look forward to implementing in my own life. One thing that I had realized myself is that when it comes to saving money on food, growing your own food crops from seed is a fantastically cheap method of providing a healthy source of much needed nutrients. I rely on http://www.sustainableseedco.com for my heirloom and organic seeds due to their extensive selection of crops. Hope this helps and thank you for the tips!

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