Do you know all the Categories for a Hurricane?
If you live anywhere a Hurricane might impact you, you probably do! We learned soon after moving to the coast of North Carolina that we stay for a Category 1 or 2, consider leaving for a 3 and definitely leave for a 4 or 5. Having only been through two Tropical Storms and a Category 1 Hurricane since we’ve lived here, I may re-evaluate the whole “stay for a 2” plan but luckily, we haven’t had to deal with that yet.
Hurricane Season starts June 1st and this week is Hurricane Preparedness Week. It’s time to check the plans, check the supplies and re-familiarize ourselves with all the weather terms.
Having all this in mind, I created the Categories of the Financial Storm. What Category do your finances fit into? As a result of my own experience and working with clients for as a Financial Coach, I have developed the following scale:
Category 1: Earned income, all the bills are paid, completely debt free (mortgage included). There’s a lot of money left over at the end of each month and you just need a plan.
Category 2: Earned income, all the bills are paid, NOT debt free. There’s a lot of money leftover at the end of each month and you need a plan to become debt-free, including the mortgage.
Category 3: Earned income, all the bills are paid, NOT debt free. There’s little to no money leftover at the end of each month and you need a plan to manage the money you do have AND begin to pay down the debt. However, any minor financial event will quickly place you in a Category 4 or 5.
Category 4: Earned income, behind on some bills, NOT debt free. There is NO money leftover at the end of the month and you find yourself literally living paycheck to paycheck. You are super stressed the last few days before you get paid again that nothing “major” happens where you will need money because there’s nothing there until payday.
Category 5: In weather terms, a Cat 5 Hurricane leaves “Catastrophic Damage” . This is the worst of all the storms. The highest Category a hurricane can receive. In this category, you have little to no income, you are behind on your bills, collection agencies are calling, you have debt and you are barely able to get by day to day in terms of money.
Every client I have helped fits into one of these categories. We used to fit into the Category 3 financial storm.
If your financial situation where a Hurricane, which category would it be? Regardless of the intensity of the storm, there is always help.
If you need help with “financial storm prep”, I always offer a FREE 30-minute consultation over the phone. Please email me at MelissatheCoach@gmail.com so we can set up a time to talk!