Planning for Bad Economic Times - KULR-8 Television, Billings, MT

Planning for Bad Economic Times

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With the government shutdown still in effect, furloughed employees currently are not getting paychecks. Financial advisors say it's a good time to think about planning for bad economic times.

"One of the lessons that I would hope people would take away from this is having six months income banked for an event like this," said Bobby Shaw, Eide Bailey financial advisor.

Shaw said if you haven't planned for those times without income, first look at what you can do to cut back.

"Do an accounting. How much cash do I have? How long will that take me through these things?"

Shaw said if you need cash, consider cashing in certificates of deposit before anything else. He also said always have a cash reserve for unexpected incidents like illnesses.

"Just back up and look at it and say, can I live on 80 percent of my income?" Shaw said. "And divert 10 percent of my income to my retirement plan and 10 percent into a savings plan. If you really want to accumulate a rainy day fund or money for an emergency like this one of the most important things you can do is make it automatic. Just have it drafted out of your check, don't ever see it. You'll forget that you have it."

Most importantly, Shaw says continue to save, no matter what, because every dollar will help during tough times.