Meet Joshua, a single dad with a ten-year-old son,
helping to get his son out of bed and prepared for school while, getting himself
ready for work as a welder. Joshua clearly understands his commitments and
responsibilities, to keep himself and his son healthy, with a safe and secure
roof over their heads and with transport options to benefit their lives. Joshua,
clearly need some advice as to the hidden cost, which can and would have a devastating
effect on his personal financial plan, also known as statement of affairs, and
ultimately, eating into his income and reducing his ability to grow his savings
and pension.
Basic living expenses inclusive of Healthcare, the
expected and unexpected cost, must be in a personal financial plan. Nutritious
food, with an emphasis on variety and taste, can be and would continuously become
easily budgeted. Over the counter pharmaceuticals, standard and replaced after
use in a medical kit, are more difficult to budget. Planned doctors' and other
healthcare specialists' visits, can be and should become routine and easily
budgeted. Whilst, unplanned healthcare cost must be addressed either by free or
cheap public healthcare, by group health insurance via an employer, by personal
savings, a fixed amount monthly, or by a combination of all available options.
Shelter cost must also be included in basic living
expenses and in a personal financial plan. A sound secure structure with a
dependable Electricity supply, requires a budget for monthly rental of premises
or mortgage payments and forecasting the usage of electricity to estimate future
bills. The structure becomes a home as furnishings and appliances are placed in
it, understanding how this affects the budget is key. All such appliances,
furniture and fixtures, would require savings, budgeted monthly, to address its
replacement cost, at the end of its useful life. All Electrical and Electronic
devices will increase electricity bills. Further, is an additional cost for
curtains, sheets, cutlery, etc.
Basic living expenses can also include Transportation cost
and must be presented in a personal financial plan. Public transport or private
taxi service cost to school and work, and back home, can be and should become routine
and easily budgeted. Self-driving options, will require a driver's permit,
which cost is prepaid and must be prorated, into the budget, to cover its
renewal. Rental vehicle cost, for special trips, will add fuel cost, insurance bills
and some hidden maintenance cost. Owning a private vehicle cost, to go at your own
convenience, will add to the budget fuel cost, routine insurance bills, vehicle
road inspection cost, scheduled maintenance, unscheduled repairs and legal violations
ticketing cost.
Hidden cost needs to be addressed by budgeting a
calculated amount across income periods. In other words, if income is paid
monthly, set aside a fixed amount each and every month for healthcare. And if
the electricity bills come every two months, divide the estimated amount by two
and get accustomed to paying it along with monthly rental of premises or mortgage
payments. Also assign savings, budgeted monthly, to address appliances, furniture
and fixtures replacement cost, by dividing the selling price in store now, by
the number of months these fixed assets should last. Most importantly, before
purchasing a vehicle talk to other vehicle owners.
Rationale
T.A.J
& Associates Company Limited uses this occasion to comment
on topics that have been covered, both academically and by the mainstream media,
to add its opinion and point out investment opportunity, not to invoke any social
action.
