Picture these scenarios
Here’s the bad news: These types of emergencies happen to people everyday and we all know (even if we would like to deny it) that eventually, some unexpected expense will inflict itself on us. Often these events throw us into intense, heart pounding panic and stress.
But here’s the good news: You can downgrade the emergencies to inconveniences by planning ahead and having an emergency fund in place. You will be able to sleep soundly at night knowing you are prepared to handle whatever life throws at you.
An emergency fund is your financial life jacket. It’s money which keeps you afloat when it feels like the tide is rising and you might go under. If you’re already in debt, this saved money can put a stop to borrowing more. If you don’t have debt (congratulations!) you still need money for those unpredictable surprises that inevitably occur.
The answer really is, “It depends.” However, most experts usually say to have three to six months’ worth of expenses covered. Here are the most important things to be able to pay for when things get really tough:
These needs differ for everyone, so make sure you keep in mind what these costs look like for you, as well as the people you support financially.
A good rule of thumb is to add these expenses together and then multiply by 3 or 6. This is bare bones but certainly will keep the wolf away from your door. This small emergency fund may not make you feel secure especially if you are:
In this case, go ahead and decide on a bigger number. You can always work on your goal and save more until you are sleeping soundly at night. Be sure to talk with your partner so you both are feeling protected.
More good news! There are several ways to get started.
Get ready to strengthen and flex your saving muscles. Saving is easier if you put some habits into place to help your emergency fund grow.
The most important point here is to think and talk about the possible answers to this question AHEAD of time. After all, it is money you have set aside for an emergency so you need to honor that and spend it only when it is necessary.
Be alert for these traps:
Whether you save a little at a time or make a big deposit, an Emergency Fund can keep you from going further into debt, avoid money fights with your spouse, and give you peace of mind.
The most important thing to remember with an Emergency Fund, as with all saving plans, is you have to be intentional about it, set realistic goals, and chip away at them. The systems you put in place will be crucial here: if it isn’t easy, you won’t do it. So keep it simple.
An emergency fund is a critical component to building wealth but it isn't always easy to implement, especially when you already struggle with building wealth and staying on top of your finances.
But that’s where the guidance of an Accountable-accredited coach can help! Not only will we assist with the creation of an emergency fund, we’ll do it in a way that aligns with your unique situation and juggle all the other moving parts in your spending plan to ensure that your needs are never compromised in the process.
If you’re ready to take things to the next level, let’s get in touch to see if coaching is right for you with a FREE 30-minute Coach-Match session! This is an easy-breezy no-obligation call where we’ll get to know you and your situation a little bit better. How does it help? It’ll give you a chance to evaluate your current financial scenario, know whether coaching is right for you, and, if you do decide to move forward in the future, this call will help us match you with a coach who is perfect for your specific financial ambitions and challenges!
We’ll find the perfect Financial Coach to analyze your situation and create a plan that’s easy to execute and will have you hitting your goals in no time. Book a call here →
Parents are stressed because their money is stretched thin and retirement savings are sparse or not there at all. Ron and Meg Knapper know how that feels. They felt embarrassed, even with Ron’s MBA and Meg’s Masters in Education that they didn’t have control of their money. It was frustrating having money slip through their fingers. They changed their mindset, habits and behaviors and are now thriving!
Ron and Meg are passionate about helping other couples avoid the struggle they experienced and instead enjoy the security and confidence they have found. They have both completed coach training and started Knapper Financial Coaching in 2017 to help parents find, keep, and grow their money.
Coaching as a couple provides the strongest opportunity for their clients to be seen, heard, and understood through 1-on-1 coaching, speaking, and workshops. Ron and Meg continue to sharpen their coaching skills by participating and serving in leadership roles with Coach Connections, LLC and the Accountable Network.
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