Recession-proof Household Budget

Recession-proof Your Household Budget ““ Five Important Steps,~ Dr Patrick Mbajekwe, Times are tough. Every day brings news of new layoffs and business closings. Even when your job is secure, it is smart to be concerned and to take steps to protect your family from the worst of the current economic crisis. So what can you do to recession-proof your household budget? Check out these five steps.

Start Saving Experts suggest having three to six months of your household budget in available savings. In good economic times, it was easy to find a replacement job, and it was often hardly worth the effort to file for unemployment. Today, even with extensions, unemployment is likely to run out before you find a job — and remember even with unemployment benefits your income will not be at the same level as your current salary. Cut Spending Sure it is easy to say — save more — but not as easy to accomplish. Now is the time to take a close look at your family budget and where your money goes each month.

Are there expenses you can eliminate or trim? Do you need all those cable upgrades? How much does your family spend on phone service each month? Eat at home more frequently and shop more carefully for groceries. You do not need to eliminate all luxuries, unless you are anxious about finances, but cutting back on a few and banking that savings will go a long way toward your peace of mind. Stick to a Budget Making up a livable budget will help you see not only where your money goes but also help you find ways to cut expenses — now when your goal is to save money but possibly in the future when cuts become a necessity. When designing your budget keep an eye on it for a couple of months so you can catch all the infrequent bills and expenses as well as to see how realistic your allocations for items such as groceries are. Do not make your budget too tight or you will break it before you have even finalized it.

Practical and livable are vital in helping you stick with it. Eliminate Debt Start with short-term debt such as credit card bills, student loans, and vehicle loans and cut down your monthly bills. Double up wherever possible and as soon as you have paid off one bill then apply that payment to the next. If you can trim down your debt to only your mortgage then focus on saving cash — do not worry about paying off your mortgage. That is usually a healthy debt.

Look for Loose Cash Well, you can start looking in the couch cushions for loose change, but the real cash might be up in your attic or your garage. Hold a garage sale, utilize online auction services, or visit a local second-hand store and turn your clutter into cash. Now more than ever, people are looking for bargains to take advantage of that market and clear out items you do not want or need anymore. It may take time to stage that garage sale or process everything through auctions so grab it now — when you are not desperate and can be sure you are getting the best deal. How many paychecks are hidden in your attic? No one is recession proof, and no budget is perfect, but taking a few steps now to protect your family and your budget will help you rest easier — and prepare for the worst.

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