Personal Finance: Step 1 - The Emergency Fund

From CNBC "More than half, 51%, of Americans have less than three months’ worth of emergency savings, according to a recent survey from personal finance website Bankrate. The survey includes over 1,000 responses from telephone interviews conducted by SSRS Omnibus between June 22-27, 2021. For 2021, 25% of survey respondents indicate having no emergency savings at all, up from 21% who said they didn’t have any in 2020. Another 26% say they have some emergency savings, but not enough to cover expenses for three months. That puts many Americans well behind the three to six months worth of living expenses financial experts typically recommend having set aside in an emergency fund." ​

It is my personal belief that before you dive into eliminating your debt and consumer obligations, you must at least have some kind of "emergency fund".

Whether it be $100, $500, or $1000 (suggested), it is imperative that you have a small fund in the beginning to fall back on if things go sideways.

Yes, this is a hard fact to deal with, but the more you put off having some type of lifeline, safety net, or whatever you would like to call it, the more you will rely on using credit, loans, and other high-interest options to finance your lifestyle.

Yes, the phone is ringing. The red and yellow letters are stacking up, but you really need to accomplish this step, and I mean immediately!

So... let's take this in tiny bites.

Think of one thing in your current budget that you could do without. This could be the Starbucks or what I like to call "Foo Foo Coffee" you treat yourself to a couple of times a week. This could add up to a sizable and stackable emergency fund in less than 2 months if you think about it and dedicate yourself to it.

Some other things you could put on hold might be those group lunch outings, happy hours, habitual snacks, cigarettes, or whatever it is that you can sacrifice to get you to that first $100, $500, or preferably $1000.

There is a silver lining in this ominous cloud...

When you put away that fund, you can count that as the first win in your steps to becoming financially free and self-reliant.

There is something you will discover when you begin to sacrifice and save, even if it's just little bits of cash and income.

The satisfaction of knowing that you have a couple of dollars to fall back on in the case of a real emergency is comforting to know, and the feeling of less stress in your life is liberating, and isn't that what you are seeking?

Liberty....