Peace and blessings. Welcome to Talking Dollars and Cents with the Wealth Builder. For this article, I want to get back to the basics: Making Sure You’re Prepared for the Next Financial Emergency you may face. While the economy has bounced back from the pandemic and unemployment is at historically low levels, signs of the economy slowing down are starting to appear on the horizon. Inflation is at some of the highest levels seen in the past 50yrs, interest rates are at 20yr highs, and employment is starting to slow. What does this mean for you?
Considering: The average American has less than $1,000 in an emergency account to get them through a crisis; missing one or more paychecks can tip a person into a financial catastrophe. Waiting on our government to come and bail the average person out (Good Luck on getting a bailout unless you’re a CEO of a Bank or Airline) may come too little too late. So what is one to do?
The 1st tip I give to all clients is to get your head out of the sand and truly review your current financial situation. There’s a saying I was taught a long time ago: “You can’t EXPECT what you don’t INSPECT.” Start with gathering your bank and financial statements and insurance documents, and pull out all of your credit card and loan documents. Don’t forget to include your utilities, groceries, and other essential items. Take all of your monthly expenses and add them up. If you’re blessed to still have income coming in during this time, take this amount and determine if you have enough income to cover all of your expenses. You know what you’ve just done: CREATED A BUDGET! I know Budgeting seems difficult, but as you’ve just seen, it’s fairly simple. Now if you don’t have income coming during this time, here’s where having an emergency fund is key. What is an emergency fund? It’s an account you can get to in a time of crisis; that has 3-6 months of your monthly expenses. If you have 3-6 months or more saved in your emergency funds–you’ll make it thru.
But what if you don’t?
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