As I sit in the backyard with the 72 degree sun shining down and warming my legs, listening to the birds sing, I’m in heaven…
How quickly could that change?
With world tensions and politics constantly changing, and in light of the recent health scare everyone has experienced, it’s safe to say that it could change pretty quick… Overnight even.
So many around the world have suffered financially from suddenly becoming unemployed. Industries such as credit card companies, student loan lenders, auto lenders, mortgage lenders, and others are allowing deferments.
However, it’s scary to have to rely on these emergency “bail-outs” when a crisis happens…
Enter: The Crisis Fund!
I don’t know about you, but I like to be prepared for the unknown and often inevitable. It’s why fire stations recommend a fire safety evacuation plan. It’s why there are light up exit signs posted above doors in public buildings.
Losing your job, a fire or a storm that destroys part of your home, a pet that gets hurt and needs unexpected medical care… Any of things and more are very realistic events that could happen to anyone at any time.
So, how do you go about building your crisis fund?
Build Your Budget
There are a lot of different ways and methods to do it. The first step would be to budget out your monthly income and expenses to see how much money you have leftover. Or if you live mostly paycheck to paycheck, see where you can switch some spending around.
If you’ve never worked off of a budget before, or if it’s been a while and you just need a refresher, check out my FREE Budgeting Worksheet!
Once you’ve got your budget worked out, I recommend saving 50 dollars a week for 6 months. Don’t let this number daunt you! It’s as easy as making your coffee and lunch at home every day… Instead of hitting the Starbucks in the morning and the local restaurant for takeout!
Once you start seeing those savings piling up, you’ll be glad you did (and you will probably even feel healthier too!)
Of course, if you’re the type who hates cooking or just can’t give up your morning coffee run, that’s okay too. Check out my 33 Ways to Cut Back Monthly Spending to see other ways to save that 50 dollars a week!
Saving 50 dollars a week will give you 1200 dollars at the end of 6 months. I would recommend you keep saving past the 6 month mark, but 1200 dollars is a great start.
A Word of Caution
You should avoid the mindset of “Oh, if something happens I’ll just use my credit card.” Having cash in the bank (or better yet, in your hand!) will trump borrowing money any day. If an emergency event happens, you will feel good about yourself. You can say that you were able to take care of yourself and/or your family without having to pay back that money at a later time.
Go Forth With Confidence!
Building this crisis fund will instill confidence in yourself that there is hope for your finances! Every little thing you do to grow yourself will show you that there is always the possibility for change.
And with that crisis fund in the bank waiting for a rainy day, your worries will melt away because you know that you’re prepared.
I hope this post finds you well and HAPPY SAVING! 🙂