Weatherproofing Your Finances

My last trip to the grocery store resulted in me spending almost $100 for a few bags of food. A couple years ago, it seems the same items would have cost much less. However, filling up your gas tank is now surprisingly cheap. This past weekend, I filled my Tahoe for $36. I remember when it cost me close to $90 just a few years ago.

Based on where you live, the cost of rent and housing varies greatly. A recent article in this newspaper reported that the average selling price for homes in Casper is higher than it was a year ago, even though many people have lost their jobs. Another article featured a local apartment complex that was full one year ago but now has plenty of vacancies, with rent coming down to attract tenants.

Trying to predict what things will cost and where the economy is going is like throwing darts blindfolded. Take your best guess. You can listen to 10 different economists on any given day and get 10 very diverse opinions on where the economy is headed. And what is happening in Wyoming is often much different than what is happening in other regions of the country.

As Wyomingites know too well, the economic situation in this state can change quickly and unpredictably. We are still very economically dependent on commodities and many people working for oil, gas and coal-related companies have lost jobs. At the same time, companies in other sectors are thriving. Your personal economy, which is based on individual circumstances, may be completely different than your neighbor’s.

Even though your economic circumstances can change suddenly, you can plan in advance and prepare yourself for whichever way the wind may blow. Weatherproofing your finances is a good idea so you can effectively fight whatever headwinds may come your way.

Weatherproofing involves looking ahead at what could change in your life. What if you lose your job? What if your spouse loses a job? What if you get sick and cannot work? We all know someone that has gotten into financial difficulties. We tend to think these problems will never happen to us.

Pretend your income stops and living expenses keep rising. How much money will it take to pay your bills for as long as necessary? Knowing what’s required to support your family for six months or a year is good information. You can then prepare yourself by building a rainy-day fund.

Keeping your debt manageable is important when it comes to controlling your destiny. If you are living paycheck-to-paycheck because you are making payments on your house, cars, boats, snowmobiles and credit cards, consider a scenario in which you are unable to support those expenditures. Figure out what items are necessities and what things are luxuries, and consider starting to make some hard choices to get on sound financial ground.

Knowing in advance how you can adjust to changing circumstances can be comforting. Can you or your spouse change jobs? Are you willing to move to improve your financial picture? Can you spend less and save more to buffer your reserves? Weatherproofing your finances will give you peace of mind and the knowledge you can weather any storm for as long as may be necessary.

This commentary originally appeared March 5 on TheCasperStarTribune.com

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The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2016, The BAM ALLIANCE

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Connie Brezik, CPA/PFS, CFP®

As a wealth advisor at Buckingham Strategic Wealth, Connie works with clients to form a comprehensive financial plan tailored to their individual circumstances, one that includes portfolio management, tax strategies, wealth transfer considerations, retirement analysis and education planning. She welcomes the chance to help clients work through difficult situations, finding solutions that they may not have thought of and guidance about what to do if their plans don't work out as anticipated.

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