Having a Backup Plan By Brenda Williams At Isnare.com Ezine Articles

If you were to suddenly be fired from your job tomorrow, do you have a plan of action in mind for what you would do? How would you feed your family? How would you survive? What about your bills and other expenses. Some studies suggest that the average person is only two to three paychecks away from being homeless...two to three! For the average family, sometimes they can get away with up to eight paychecks. Still, the fact remains that none of us are safe from being kicked out on the streets if a) we aren't more careful with our finances and b) we don't have some sort of an action plan in mind for when and if things go wrong.

Life is not predictable. Even the most successful people can fail, and even the most careful people can make mistakes. However, by creating and having a plan of action in mind to use, we are at least being smarter than some others. In order to begin thinking about creating a backup plan, you may need to start by getting out a piece of paper and a pen or a computer. For some people who are more visual, it helps to have everything laid out in front of them. In that case, you may want to organize information onto a sort of spreadsheet on your computer. On your computer, you will want to create a spreadsheet that outlines what all of your current monthly expenses are from your rent or mortgage to your electric, water and gas bills. Some people even get so detailed as to include how much money they spend on groceries each month as well as how much money they spend on gasoline.

Without sounding to fanatic, it may help if you listed every single expense that you have (at least for the first few months) so that you can more accurately see where your money is going and how it is being spent. I keep a detailed spreadsheet of my monthly expenses and was able to see how much money I spent in gasoline one a couple of months ago. I was shocked at how high it was, but then I remembered that I had done a lot of long distance driving to visit family. So for me to use that particular month as a “typical” month for average expenses, I wouldn't be able to because it is not an accurate representation of my lifestyle.

After you have created a spreadsheet of your expenses, you need to make sure that you keep up with it. Technology is great, and nowadays, I am notified either via email or via a text message whenever there is a bill due. When this happens, I usually open up the spreadsheet on my computer and simply punch in the amount for the bill for that month. After you've gotten a fairly good idea of how much money you are spending each month, you will need to look at how much money you are making on top of that. For example, after you are done paying all of your bills, how much money are you left with? Do you have a savings account or 401K? Do you live with a roommate or a spouse who is working and would be able to pick up the slack until you found another job?

For inquiring minds, you can actually figure out how much you would make in unemployment if you jump on the Internet. All that is typically required to do so is your social security number and perhaps your birthday. Most people are shocked at how little unemployment they are entitled to- far less than what they were getting paid when they were working. Be smart with your money and track your finances, and most importantly, have an backup action plan should you suddenly find yourself unemployed.

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