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7 Steps of Budget Planning to Avoid Financial Disasters

Budgeting Planning to Avoid Financial Disasters

  1. The First Step of Budget Planning to Avoid Financial Disasters 

Budget planning to avoid financial disasters starts with not buying too big with the big stuff such as cars and homes is one of the biggest reasons many cannot withstand a small business or personal financial disaster.

Many of us forget that there are affordable ways to buy homes and cars to avoid future financial disasters. What happens, is that these two items are based on way too much emotional buying. Keep your head on straight by researching before you purchase. Learn more on my instagram.

Ask questions like; Do I really need a new car? What will the warranty maintenance cost on my new car? What if I purchase the same car 3-4 years old, what would the savings be?

If you have a job, no matter how secure you think you are, that security could be in jeopardy at any time. So, purchasing a car that you can buy cash or with very low payments will be the better option.

The same holds true with a home, if it is too large, with a stressful payment, the smaller home with the lower payment, that carries less stress may be a better option.

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  1. Stay Properly Insured

The second step to budget planning to avoid financial disasters seems to be plain old common sense. But, sometimes people with a home and car let important insurances lapse due to illness or thinking they don’t have the time, they let important insurance lapse, due to simple negligence.

Stay fully insured with a car, home, health, life, and if you own a business – all applicable business insurance. A small business lawsuit should always be covered with business liability insurance, not your personal assets –  so, don’t take the chance.

  1. Don’t Waste When Times are Good and Income is High

We have had many economic downturns and upturns in the past several decades. The one regret I have heard a lot when I talk to people who make a lot of money when times are good is — “I lost my mind when I had a lot of money, and spent without regard to the reality to the future, then a financial disaster came”.

Because nothing is guaranteed, even good times, it is important to handle your money as if the money will stop anytime, that will help protect your assets.

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  1. Let Your Kids know Money Doesn’t Grow on Trees

There are some parents who, despite much evidence to the contrary, feel it is important their kids need to have all the material trapping they did not have. It is not necessary, and it is not true.

Your kids will literally begin to think that money grows on trees and drops from the sky. Your kids know you love them when you give them positive time and attention, so it is not necessary to spoil them, and it may lead to a financial disaster.

You can reward them without giving them too much, some parents to the tune of going bankrupt. At this point your kids probably are not aware of potential financial disasters, but at least you can start to teach them money skills.

  1. Have a Sick Fund for Days Not Covered by Extended Illness

Most jobs have sick leave, most small businesses have no sick leave unless they create it themselves. As an employee, you may run out of sick leave if you have an extended illness. Save money in a sick fund to cover an extended illness. This is especially important for small business owners.

  1. Make Your Savings a Bill

Create a general savings fund and treat it like a bill. You are probably seeing a pattern here. Saving money as several bills is just as important as paying existing bills. It should be a part of a general budget plan for financial disasters.

  1. Don’t Borrow From Your 401k, Borrow From Your General Savings

As far as I am concerned, borrowing from a 401k is a budget planning financial disaster unless you are suffering from a fatal illness, borrowing from your 401k should not be a consideration.

You should have an automatic saving account for financial disasters that you can borrow from.

The 7 steps of budget planning to avoid financial disasters will above will get you on the way to solid financial success.

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Lois Center-Shabazz| Money Strategist | Course Delta Agency

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7 Tips for a Budgeting Basic Bounce

Budgeting basic bounce may be defined as follows. Ever heard the expression, “I don’t know where my money goes” another is, “I don’t have the things I need and can’t afford any of the things I want”.

If this is a problem you have, you may want to look at your budgeting basic skills. And read this budgeting advice, paying close attention to the process of creating your optimal budget, and then sticking to it.

1. Start With the Essentials

Your budgeting basic bounce should include your essentials to start with. You must have a home, food, and water, at a minimum to exist. So, those are the things you should budget for and pay off, first.
A) Rent, Food, Utilities, Car Payment (if you must have a car for work)

A Budgeting Basic Bounce Can Take Your Budget Over the Top    --Lois

If you don’t pay for insurance your car can be impounded and your home would not be replaced if it is destroyed by fire. So of course insurance is an essential budgeting basic skill. You could lose your credit rating if you don’t have car insurance and an accident is your fault.

The other person’s insurance company can charge you with the payout and lien your credit. In most, if not all states liability car insurance is the law.
B) Homeowners insurance, or Renters insurance, and Car insurance

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If you become ill, could lose your home and assets to a hospital lien? Possibly. To prevent this, you must have health insurance always as a budgeting basic bounce.

If you do not have health insurance, in most cases a hospital will treat you and charge the bill to you, with collection calls to pay up, until you satisfy your bill.
C) Health Insurance

If you have loved ones, that is children or a spouse who will need help with bill paying and life maintenance in the event of an untimely death, you should have life insurance, it can be an inexpensive policy, but it is wise to have something.
D) Life Insurance is a budgeting basic skill

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2. Make Your Hierarchy

Make a hierarchy of your most important to least important needs. Make a list of the most important to the least important budgeting basic items you pay monthly.

Try to pay the top 3-6 items, no matter what, even in the event of a financial emergency, and the bottom 3 that can be temporarily eliminated in a dire emergency.

Slay Your Finances Like Your Life Depended on It With Budgeting Basic Skills,    --Lois

3. Your Savings Please

You will have unexpected expenses from time to time, so an emergency savings may cover those expenses, it will also be your cushion for your top three monthly expenses.

Make this savings account a bill that is taken from your checking account or your check monthly so you don’t have to stress paying saving it. Even if it is only $50 per month, start saving now, it adds up. If you can afford more, put in more.

4. Filling in Gaps

Fill in gaps for your quarterly, semi-annual, and yearly items. Some of your expenses will be quarterly, some may be twice yearly, and others once a year.

Create savings for these items, pull the money out monthly to fund these irregular accounts when they come due. When the item comes up, take the money from this account, instead of from your monthly pay- check.

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5. Maintenance Savings Budget

A second emergency account should be for general maintenance. This is a big item that throws off many budgets. Instead of borrowing money for a car or home repair, borrow it from your maintenance savings budget. This saving account could also include your vacation savings.

6. Your Peace of mind

Every time you think of going off your budget, think about the peace of mind you will get from having a balanced budget, paying your major bills with ease every month, and having extra to cover unforeseen expenses.

Your strict organization is the key to a great budget, this is a general organizational plan. You will create a specific plan for your budget, allow this plan to be your guide.

7. Get Help With Your Budget, Don’t do it Blindly

Pick up your free personal finance gifts now, track your spending and plug holes in your budget for extra money toward expenses or savings. Use the simple but powerful, Budget Plan to guerrilla plan your budget with an extreme organization now.

In summary: Only you can put that budgeting basic bounce in your budget if you go from top to bottom with an analysis. Understand the essential such as rent, food, homeowners, renters insurance and health insurance. Then is you have dependents – life insurance.

Make a hierarchy of the most important to the least important budget items.
Get your savings in order and fill in the gaps for quarterly or yearly payments.

Now enjoy your peace of mind with your wonderful budgeting basic bounce and new found budgeting basic skills. If you don’t understand how to create the best budget for you, get help. 

Lois Center-Shabazz| Money Strategist | Course Delta Agency

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Big thing budgeting in 7 ways