Emergency planning can help ease pain

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Sunday, September 23, 2001

Story last updated at 8:51 p.m. on Friday, September 21, 2001 Emergency planning can help ease pain

Associated Press

NEW YORK -- The economic fallout from the attacks on the World Trade Center is starting to spread across the country with manufacturers, airlines, restaurants and hotels announcing layoffs, involuntary vacations and salary cuts.

Financial planners recommend that people whose jobs might be in jeopardy take steps as soon as possible to shore up their finances to get through the lean times.

''The very first thing you have to do is build up as much emergency savings as you can -- build them up like a squirrel in autumn,'' said Robert K. Doyle, a financial planner in St. Petersburg, Fla.

That means cutting back immediately on all unnecessary spending, he said. Stop eating meals out. Cut back on entertainment. See what clothing purchases can be put off. Don't even think about buying major appliances for the house.

''If you don't have any emergency cash cushion, you may need to take very drastic steps to build one,'' he added. Stop making contributions to your 401(k) and Individual Retirement Account. Pay just the minimum on your credit card balances. Don't make any extra mortgage payments.

''Building that cash reserve will give you comfort, will let you sleep at night,'' Doyle said. ''It will be there if you need it. If you don't, you can always go back and replenish your retirement accounts or pay down credit cards.''

Ian Bishop, a senior financial adviser for American Express in Upland, Calif., says getting professional help might be worthwhile.

''I can be less emotional and more logical and help with decisions that will benefit people in the long run,'' Bishop said.


-- Martin Thompson (mthom1927@aol.com), September 23, 2001


And, be sure to purchase that credit card insurance protection that pays if you're laid off. Is this type of coverage still offered? You certainly would have to have it before the bad news!

-- Jim Davis (JD1642@aol.con), September 23, 2001.

The main reason why you should not be making extra mortgage payments is becuase the bank does not care how good you HAVE been. It only care how good you WILL be.

Now if you can pay it all off that is even better.

Also check to see if you can stop making the Insurance and Tax payments to the bank. You have to be well under the 80% mark to do this. Be careful you will need to put you money away to make those payments, but you can 'do it' as needed, as opposed to making it a monthly head ache. FYI many county tax payments are due / discounted an you can actually pay them late - with a premiuim.

Bill due in Jan can be paid early and receive 4% off in NOV and 2% off in DEC.
Or paid in Jan.
or paid late in feb and a penalty of 2%, or in March with a penalty of 4%.

Now you bank will go bonkers if you pay late, but you could still do it. Make sure you have the funds and all will be swell.

Do not play on the late side, any mistake could cause you to loose your house!

On the insurance issue you can raise the deductable and also pay it as a lump sum.

Check the laws, your bank will say that you may not do this, but once you have over X% paid off the law says otherwise. We had alot of fun doing this to our bank. is -4%

-- (perry@ofuzzy1.com), September 23, 2001.

All of this sounds just like the y2k talk of a couple of years ago.

-- LillyLP (lillyLP@aol.com), September 23, 2001.

I'm expecting the unexpected.

-- (CAkidd_94520@yahoo.com), September 23, 2001.

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