Can't help thinking about job security? Not surprising since recent polls show over 40% of Americans showing rising concerns about job security.Personally, I sometimes find it difficult to focus on the task at hand when, in the back of my mind, I'm wondering about what to do if the paychecks stop coming in.
Open credit available. I have heard some talking head recently mention to leave credit card lines open even if you have successfully managed to pay of the damned card. It appears that having open credit does serve two purposes.
1. If you loose your job these open cards can be used (as a last resort)
2. It helps maintain your positive credit to debt ratio.
Additionally, some advice that I took me some to embrace: Don't totally focus on paying down credit debt first. Having heard the advice of paying high interest cards first for many years this advice seems contrary to getting out of debt. On the other hand, you should also have an emergency fund. So in addition to paying down your credit cards, take some funds and add to your emergency fund. An emergency fund serves several purposes.
1. Paying minimal expense in event you loose your job
2. If you don't budget well it can be used to pay unexpected bills (automotive, medical, etc...)
One important not is that emergency funds used to be recommended to cover 3 to 6 months of expenses. Given the current environment and the amount of time it could potentially take to find a job, it is now recommended to have up to one year's of expenses in your emergency fund. Wow! at the current rate that I'm saving I hope that the economy improves way before I could struggle to save a year's worth of expenses in an emergency fund :)
Leave a comment on how you are doing with savings through these troubling times.
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