Emergency will happen and we may suddenly lose our job. In this situation, liquid funds and other assets could give us a safety net. It should be noted that our condition can be different, but there are common steps we could do. Admittedly, many families won’t survive financially when they suddenly lose their jobs and in many cases, the only thing that they can do is to plan for the worst case scenario. The most obvious step is to quickly find another job, but we could have a few months without any income and we will need to rely on our savings and asset. It may take more discipline to achieve healthy financial situation that can sustain us when we lose our job.
It should be noted that unforeseen expenses could still happen when we are still in no-income situation and this may deplete our liquid funds faster than we previously predicted. In this case, it should be a good idea to have a projection of unexpected income. Medical bills, air conditioner repair and flat tires are a few things that can happen unexpectedly. The best way to prevent surprises is to expect for surprises and prepare for them. In this case, our situation could be worse than losing a job. It means, we should be prepared to receive double blows, losing our job and spending a lot of money on unexpected expenses. In this case, we need to have a feasible income and spending model that allows us to build proper income.
In the end, we should make sure that our family can deal with the new spending model. This phase requires contant improvement, communication and monitoring. It is also important to expect variances. A solid budget system should work like a well oiled machine that can run efficiently and smoothly. It will eventually require some maintenance and we may use spreadsheet to offer us the ability to constantly make adjustments. Accumulating enough liquid funds for difficult financial situation requires constant family meetings, where we can communicate about the state of our budget.
The meeting can be held a few times each mind, for example at the beginning and the middle of the month. Our purpose should to make sure that people can get well aligned with their budget goals. This could be a bad idea to be a dictator and we may need to listen to our children and spouse. By better understanding our family member, it should be much easier to may our budget much better. These meetings should be a wonderful way to deal with any budget issue. We should let people know that their requirements will be met.
We should make continuous improvements and our systems should be able to work in many different ways. We could try new strategies as the new month arrives and the final goal is to ensure a sizable amount of liquid fund that can sustain us during difficult financial situation. It is also a good idea to read books with motivational contents about how people who lost their jobs could eventually gain financial freedom.