WARNING: The following content has a much more solemn tone than previous articles.
1. Save and Create an Emergency Fund
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After being in the foreclosure business for almost 10 years I can truly say that this business has affected me deeply and more profoundly than I never thought were possible. Every day, as we gain access to these vacant and dangerous homes, we ask ourselves "How do people live like this? What happened that brought the previous owners to this point in their lives?" Although the majority of the homes we buy are vacant, from time to time I hear the stories of what happened during an individual's financial downturn. These stories have caused me to take pause and self-evaluate my own finances as well as encourage others to do the same. These are simple tips that are not comprehensive in nature but I think make good financial sense.
First things first: start small and set a goal to create a small nest egg of $2,000. This money is there for emergencies and emergencies only. Do not touch this money unless absolutely necessary. New purse, dress or suit is not considered emergency. Learning to discipline ourselves against spending money that we know is available is hard but must be done. Once the initial $2,000 has been saved, start saving 4-6 months of normal monthly income. This will take more discipline but will pay off in the event of job loss or economic downturn.2. Live Within Your Means
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Unfortunately, the word "budget" is completely out of style, especially when it comes to a "personal budget." While accounting is "the language of business," a budget is "the language of keeping track of your "freaking" money." Where is my money going? How much did I spend? What can I afford? A budget is simply making a plan for your money before you actually have it spent. There are a ton of budget help kits out there, many of which are provided by banks. Take ownership of your dollar and make a budget. Stick to it and don't be afraid to use the words "I probably can't afford that right now..." The truth is…with enough discipline and time you will be walking the white sand beaches with diamonds hanging from your neck. Don't forget to send me a picture. 3. Get Proper Health Insurance
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Proper health insurance is MANDATORY. Do not let yourself believe that you do not need it. Accidents happen and health Insurance must be in place when it does. Unfortunately, far too many times people tell me that someone in their family got sick, and the medical bills started a financial tailspin. These accidents are often as simple as a broken finger or arm from a child out bike riding. Please, please, please. Do not overlook this important step.4. Avoid all Unnecessary Debt
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Clutter is a fancy work for "crap." They can almost always be used interchangeably and we prefer the later of the two. Crap is anything that doesn't have a designated purpose and location: things like stuffed animals, old mail, discount clothing, and broken electronics. Simplify People! You have 3 simple options pertaining to clutter: trash it, shove it in a closet, or do what most people do, rent a storage unit for $100 per month and store that junk you never use. You know what we like to do: trash it. The overall goal here is to make a space look bigger than it actually is by removing the stuff currently sitting in it. Eliminate the Hoarder in you. Be strong.