Making ₵ents: Money and Murphy’s Law
Money and Murphy’s Law
Here we are a couple months into 2013, and I have heard some interesting data regarding finances. They come from three different sources: an advertisement on television, a brief story on a news show, and one directly from Uncle Sam via our paychecks. The all have something in common: Money.
A commercial shares statistics regarding Hoosiers and their income situations in Marion County. It states that 45,000 families are one paycheck away from being homeless. That’s nearly 7% of the family households in the county. That’s right here in our own back yard. Are you saving some of your paychecks to build up an emergency fund in case you miss a paycheck? Or are you living paycheck to paycheck?
In early February, a morning news program highlighted ever so briefly the savings situation of families in America. I was curious about the details, so I looked it up on the Internet. The Corporation for Economic Development (CED) gave some statistics that gave me pause. The data from the CED shows that 44% of households (approximately 132.1 million people) do not have a savings account to help in an emergency. “Liquid asset poor” is the term used to describe families that do not have the equivalent of three months of basic living expenses in a savings account in case of unemployment. Here in Indiana, 42% do not have liquid assets in a savings account to maintain their household.
Lastly, have you noticed the lower paycheck since the turn of the year? We can thank our elected officials for this. A few years ago, we were given a break on the amount of money taken from our paychecks to fund the Social Security bucket. As time passed, we got comfortable and forgot about this reduction, and now the time has expired on that temporary reduction. If the average American family makes about $50,000 a year, it works out to a $1,000 pay cut for the year. Break that down into two-week payroll cycles, and that’s around $40 every two weeks. That may be a nice dinner per pay period or another chunk of money to go into a debt snowball or retirement account. It all adds up.
The reason I write about this is that the last four years have been difficult for many with job losses, company-restructuring pay plans, and the rising cost of food and fuel. Many of us have been fortunate to get through the financial crisis without significant changes. It is important to plan what and how you and your family will get through a financial crunch. Keep reviewing options to reduce costs and increase savings (savings, retirement, college, etc.).
Even so, “Murphy” is always lurking out there. He may come in the way of a car repair, home maintenance need, or some other major unexpected expense. Get a plan in place to enjoy the present, but secure your future. We don’t know what is ahead of us, but by making the effort now to protect your family, you may manage Murphy if he visits. He’s out there. He’s looking for somewhere to go. Murphy will come knocking; will he choose your door?
Kate is a financial expert of what to do and not do with money as well as owner of 4 Walls Financial, A Coaching Focused Company. She has attended and completed Dave Ramsey’s Counselor Training. Follow Kate on Twitter 4WFCoach, reach out to her via email at email@example.com or visit www.4wallsfinancial.com. Feel free to share ideas or questions for future articles.