Which brings up an interesting point of - should effective money management include making allowances for the wronful actions of others that could affect us. In MichaelNZ’s case it was $5.00 but what if it were 1000s of dollars. I work a monthly budget and factor in one years worth of expenses. I do include a category for emergencies (just to cover things) and put some money aside but should I make allowances for the time and effort I might spend correcting the wrongful actions of others.
There is a book I read that talks about working out your personal hourly rate. Example, you might earn $500.00 per week for working X number of hours but your real hourly rate is worked out by spreading the amount over all the hours in the week.
I think about my debt situation. I’ve spent 3 years of my life trying to resolve not just debt that I incurred but also expenses and time lost that have been caused by the wrong doing of other parties. When I first obtained lending, should I have factored in the cost of possible legal action or loss of income trying to resolve the debt. I have had to pay money and spend time to defend myself in claims against me.
Sure there is insurance for certain events and income protection insurance. But not for all possible situations especially if you are an individual as opposed to being a company.
Another example, I am wanting to use certain reference material for my seminars that could breach IP rights or copyrights. I contacted the owner to ask permission, as you do, and they immediately put the heavys on and think I’m going to use all their material and claim it as my own, without even knowing what or how I intend on using the content. Certainly their actions have cost time and money for me to respond to their claims.
Should I factor those costs into my money management plan.
I think the problem with a regular budget is that doesn’t factor in allowances for unexpected life situations or when money is taken wrongfully by others.
I hear storys of people losing money to romance scams and investment failings.
Should our budgets make allowances for those things if we want to undertake in such activities.
I don’t think there is personal insurance for those types of incidents.
We are quick to blame others for their lack of money management but there’s always another party involved that contributed to it.
Certainly it is up to the individual to control their situation and decide what is right for them.
I think what we call a budget should be modified and be called a life plan.
Sure its recommended to have put aside at least 3 months worth of income but the scope of that is for it to be used for ordinary living expenses due to loss of income.
