A Step By Step Guide to Not Rely on the Government Again
By: Tom Handy
Tags: Life Lessons, Self Improvement, Money, Finance, Self

The four steps you should follow

These steps are not hard to do but you need to make drastic changes to your life if you do not have these covered. Anyone could lose their job. Businesses could go out of business. There are very few stable and secure jobs in the economy.

If you want to be self-sufficient, you need to follow these steps.

1. Live on a budget

“Balancing your budget is like protecting your virtue. You have to learn when to say no.” Ronald Reagan

Many companies have budgets, and I believe a person should have a budget as well. There isn’t a difference if you think about it. A company has to have a budget to survive just like you do. Without a budget, you’ll go broke and owe someone money.

You should set up your budget. A budget is your foundation whether you are rich or poor. It is too easy to blow all your money if you are not careful. You may have seen millionaires go bankrupt within a few years.

For more details on setting up a budget, you should go to this article.

2. Erase your debt

“The decision to go into debt alters the course condition of your life. You no longer own it. You are owned.” Dave Ramsey

Debt is the money you owe a company, bank, or person. If you have debt, you need to get out of debt as fast as you can.

Some people misunderstand debt and pay the minimum amount. If you pay the minimum amount you are doing two things.

1. You are giving someone free money since you are paying interest on the debt.

2. You are paying more on the item you purchased since the interest is increasing the initial cost of the item.

Pay more than the minimum amount of the bill to get out of your debt faster.

3. Build your emergency savings

“It may take you a few months or a few years to build an adequate emergency savings fund. That’s okay.” Suze Orman

Financial experts say a person should have three to six months of emergency savings. The amount you save depends on the stability of your job and the financial burden you could face.

If you have several bills you need to pay, then you should have a larger emergency fund. The emergency fund will help until you find another job if you lost your job.

An emergency fund can also cover if your car breaks down, you need to make a last-minute flight, or you need money for medical reasons.

Your emergency fund should be in a stable savings account or money market account. The idea isn’t to make money but to have the money there in case an issue comes up. You want to withdraw the money when you need it.

4. Start investing if you haven’t already

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” Warren Buffett

Your investment should be a long-term plan for retirement but sometimes you may have to dip into your investment for emergency situations. Instances like you saw this year could be a reason to use your investment.

No one likes to dip in and touch their investment but if you have used your emergency fund, then using your investment would be the next source of income to use if you can’t get a loan. Sometimes banks limit the availability of money as money starts to get tight during an economic crisis.