TheUnemploymentDojo's Blog

The Back-Up Plan and The Deliberate Account.

Posted on: April 26, 2013

We always hope for the best. We pray for the best and we expect the best. Even the most optimistic character hopes for the best. BUT( and again i have consistently stated that you should never start a sentence with BUT!) you will run in to a catastrophe a couple of times in your life. This is where the back up plan comes in. A back up plan is an anticipation or forecasting of the worst case scenario projection and then extrapolating it backwards by breaking it in to smaller manageable catastrophes that you can handle.

Let’s say, you project that a relative in a far away country will be extremely ill and admitted in hospital and they have been in a coma and are about to pass away. (It is bound to happen if all your relatives are not in the same country!) So you know on average it costs $3000 round trip come high or low season! So here is the logic $3000 raised over a year is a lot less stressful than $3000 raised at the time of the emergency. So you decided to keep aside $300 a month to cater to this projection and once you reach that goal, that account is never to be touched ever…..unless that emergency arises!

Same goes for your 6-8 months of living expenses. These are called back-up plans because you never know what life throws at you and you would love to “back up” this calamity to the way things should be. Almost like a computer that has been attacked by a virus which we have no idea what it is.

Then, we have the deliberate account. It’s sole purpose is to intentionally put aside funds for things that make life wonderful. A dinner, a cruise,a ring, a trip. The main difference between the backup and the deliberate plan here being the event. One is known, while the other  is anticipated.

The only way i know about these two most crucial situations is because i have been through them as recent as 2011. I promised myself i would never let money rob me off my life’s pleasures ever again and i would like to wish that for you too. I worked strIt is mentally and emotionally exhausting and half the times we buy “stuff” without having a legitimate plan! If you want to strategically and sometimes despite the temptation to go against plan, i persevered. I knew i had to first and foremost let go of the need to prove anything to anyone and trust me, there were people i would have loved to make statements to! It was long and painful and slowly i got on track.Baby steps and ignorance was all it took and now i want to wish that for you too!

I highly recommend Dave Ramsey’s  The Total Money Makeover: A Proven Plan for Financial Fitness
system. You won’t be rich tomorrow, but you will have a datum point of where to start and that is the most important step!

It made a difference in my life by adding logic to my money management deficiency and trust me, you will soon discover when it comes to money management, you are not as smart as you think you are and it’s never too late to learn.

I urge you to spend this weekend sharpening your financial literacy. You won’t regret it.

 

Have fun!

 

Lee Kariuki

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1 Response to "The Back-Up Plan and The Deliberate Account."

Very useful info. Hope to see more posts soon!

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Lee Kariuki
1-888-MY-ETHER ext. 04466282

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