Are You Living Desperately?

My car broke down. It’s going to cost me about $2600 to $3200 to get it fixed. Unless I win the lottery or find a genie in a bottle, it’s going to remain parked in the driveway for awhile.

As I walked home from work, I really started thinking about the effect this snafu has had on my life. First of all, I realized how dependent I am on having a car. I feel like someone has cut off one of my legs. Seriously. I have to take public transportation which, as anyone who takes public transportation can tell you, takes half the day just to accomplish one or two tasks. It now takes me twice as much time to get to work and as the icing on this lovely piece of cake, I’ve had to cut my hours because the bus schedule is not very accommodating.

I miss my car.

Sad but true, however, I’m not the only one in this boat. Every day hundreds of people find themselves in this exact situation. Some people have an easier time of it because they were smart enough to put money aside for emergencies such as this and therefore are able to get back on the road quickly. Others have it worse than me. The loss of a car means the loss of a job which means the loss of a house and so on until they are sitting on the side of the road with a cup and sign.

This is because they (and I include myself in that “they”) set their life up like dominoes with each piece depending on the others to remain upright. All it takes is for one to fall over and the whole setup comes crashing down.

A life set up this way causes us to live desperately. We become so afraid of losing our jobs, losing our homes, losing our mates that we become slaves to the very things meant to help us. To get us to work overtime, all our boss has to do is hint at a poor review that may cost us that needed raise. To save that fabulous life that we built with our spouse, we put up with their abusive and/or cheating ways. To save our home we max out credit cards or take out yet another loan to catch up on the payments and plunging ourselves further into debt.

If any of this resonates with you, don’t worry. There are things you can do to help mitigate the danger of living in this manner.

Have a Plan B

Be prepared is not just a motto for boy scouts. It can safely be classified as a rule for living. You should always alternative solutions (commonly referred to as having a Plan B). Devising a plan B requires that you take a good look at your life and ask yourself “What would I do if something went wrong?”

Now this is harder than it seems simply because you can easily go overboard and psyche yourself out. The trick is to approach this question in a sensible manner. If your car broke down, how would you get to work? Do you know how your local bus system operates? Could you carpool with friends? If your house set fire could you stay with relatives? Do you have money for an extended hotel stay?
Some situations in life will require that you take extra steps to ensure a workable Plan B. For example, say you work in a job where if you lost it you would not be able to get anything comparable unless you got a college degree. You would need to get working on that college degree before things went awry.

Save Your Money

The common advice of financial experts is that you should have three to six months of living expenses saved. However that recommendation only applies when the economy is good and you have a good chance of netting a new job quickly. Now that the economy and slowly circling the drain you should increase your savings so that you have at least nine to twelve months of living expenses saved.

You should put your savings in a high yield account, such as a Money Market savings account, so that your money is working as hard as you are but one that allows you easy access should the unthinkable happens.

Pay off Your Debts

You should work to bring your credit card, student loan, car payments and yes even your house note to a zero balance and keep them there. If you have to choose between putting money in a high return investment or paying extra on your house note, choose the house note. By owning your house free and clear, even if you lose your job at least you will always have a place to live. And besides the less debt you have hanging over your head, the less you are enslaved to your job, spouse and creditors.

Generate Additional Streams of Income

Do you want to know why rich people are rich? One reason is because many of them have multiple streams of income. They own several companies, own stocks, bonds and other investments. If one line of income should fail, they have others to rely on to see them through that hiccup.

In this day and age, you cannot afford to be solely dependent on one income source simply because that income source can be cut off unexpectedly and at any time. There are many things you can do to generate additional income. You can take a second job or start an internet business or invest in the stock market. You can write a book or sell homemade crafts or open a weekend catering business. Even if you are married and both of you work, you should still endeavor to build additional streams of income. If anything, you can use the extra money to pay off outstanding debt and save for rainy days.

So what am I going to do about this car situation? Well I’m going to take my own advice and work harder on my online business. There’s nothing like adversity to motivate a person to turn their dreams into reality. Here’s to a prosperous future that includes a new car.