Establishing Your Emergency Fund

Establishing Your Emergency Fund

Cash is King but most of live a cashless lifestyle.  It’s just the way the world is moving.  Most of us use our debit cards or credit cards during our daily lives.  Few of us write checks anymore and no one should be using money orders for routine transactions. But what would you do if the power goes out for a few days?…  A few weeks?…  A few months?…

I’d like to think that you’re prepared because you’ve been reading our blogs and articles.  You’ve stocked up on your food, water, medical and protection supplies.

But just in case your stockpile isn’t quite how you want it, here are a few financial tips to help you move in the right direction.  Your goal is to get out of debt and prepare for disasters.  Here is the basic plan:  Start an emergency fund (or two), payoff all credit cards while building your stockpile, and pay off all car loans while building your stockpile.

 

Your emergency fund(s)

First you need to start and emergency fund.  If you have no emergency fund, stop building your stockpile, stop going to the movies, stop all unnecessary spending until you have an emergency fund.  It’s that important.  I hear it all the time; “You can’t eat gold, buy wheat instead.”  Yeah that’s great advice until you have no money to fix the car and lose your job because you can’t get to work.  Now you can’t afford to support your family or continue building your stockpile.  It’s a fact of life, everything revolves around money.  Okay, it’s a fact of life TODAY.  One day when our economics change we’ll be forced to revert back to the barter system, where a pound of wheat will get your wagon wheel fixed.  Until then, cash is king.

Your goal – Save $1000 and put it in your emergency fund.  Think savings account.  Some where it is not easy to access the money, but you could if you needed to.  Remember this is an emergency fund.  Not your 3-6 month savings of living expenses all financial advisors say you need at a minimum.  This is your “I need to fix the car quick” fund, not your “I have sell some stock to fix the car fund”.

 

Now that you have an emergency fund in the bank, you need to save another $1000 in small bills (no bills smaller than US 10, but you should have some smaller bills like 10’s, 20’s and 50’s) and hide it in your home.  Preferably a home safe, if you have one.  Make sure your spouse and/or trusted family member(s) have access to the key/combination or location of the money.  Remember credit cards, banks and ATM’s may not work in an actual emergency when the power is out.  You’ll use this money if you need to bug out and did not, or could not carry enough supplies to make it to your bug out location.

In the next few articles we’ll discuss how to further your financial plan…

If you don’t have a plan, you don’t know where you’re going.  If you don’t know where you’re going, you’re lost.  Plan your work.  Work the plan.

 

Prepare Strong.

Prepare.  Survive.  Live.

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