Archives For Emergency Fund

I was reading the 2011 Warren Buffett/Berkshire Hathaway letter.  Warren Buffett is like a wise old grandpa, who just happens to be one of the richest people in the world.

He gave lot of insight into the economy and financial situation today.  What struck me most of all was this letter from Ernest Buffett (Warren’s grandfather) which was on page 23.

Warren found it in a safe in 1970 while executing a will of a family member…along with $1000.  Impressive…especially since it was written in 1939 (10 years after the Great Depression started).

Lessons Learned From Ernest Buffett

  1. Warren Buffett is not a freak of investing and saving nature…he is part of a legacy of savers, businessmen, and wise investors.
  2. Emergency Funds are a must.
  3. Leaving a legacy of character , hard work, and wisdom with money can change the world.  (I wonder what my grandchildren will accomplish?)
  4. You can change your family tree.
  5. Saving money is possible during hard times. (he started this 10 years after the Great Depression before the economy began its recovery)

Today marks the beginning of Hurricane season. Call me weird, but I like to track the hurricanes each year. Maybe it is because I lived in Miami one summer or maybe it is my fascination with natural disasters. Every few days finds me checking the National Hurricane Center site. This year the prediction is for an 85% above normal hurricane season. Are you ready?

Continue Reading...

An Emergency fund is like a dam, it keeps you from getting wet.

“You need an emergency fund.” You’ve heard this before from your mother, the talking heads on TV, and now I’m telling you. So why haven’t you started yet?

It’s tough to save. I mean there are so many many things to do now that are much more fun that saving for something that might happen in the future.

But, what if it happens? That thing you dread? A car wreck, a layoff, a sick kid? Do you have the ability to face a $10,000 punch to the financial gut? Can you even handle a $1,000 new transmission in your car right now?

An SMR Research study finds that 43% of you reading this, can’t. Time to get moving!

A Starter Emergency Fund

Today is the time to start saving for an emergency. Life happens. Situations that you can’t control will affect your bottom line, that is why we prepare by stashing away some cash in a rainy day fund.

Start small. Put $1,000 in an savings account that you won’t touch unless there is an emergency. If you make less than $20 K a year, then a $500 starter emergency fund is fine. If you have an irregular income, then you’ll want more than $1,000 for your beginner fund.

Why not pay off my debt with that money? The point of this starter emergency fund is to keep you from going further in debt. This fund is just a small levy to protect you from the flood of debt. You’ll grow this amount, after you’re out of debt.

Get this done quickly! Work overtime or sell that junk in your closet to get this starter fund going. You’ve figured out debt is bad, so let’s avoid going further into debt by having a little protection.

Fully Funded Emergency Fund

You’ll want to top off your emergency fund (Video) once your debt is gone (not including your mortgage). How much will you need? Most experts recommend at least 3-6 months of necessary expenses. This is not 3-6 months of a full-blown budget, but only necessities. If you get into trouble, then we all could cut expenses: cancel gym memberships & cable subscriptions, stop eating out, etc.

How do I save for this? The easiest is to have a deduction automatically withdrawn from your account every month. An example would be to take $100 out of your checking on the 15th of every month into a high yield savings account (non-affiliate link) or into a money market fund

Keep building up that amount until you’ve got 3-6 months of expenses. Kick in some bonuses and your birthday money and 3-6 months of expenses will be saved in no time!  If you want to save more, then go ahead. Nothing wrong with a little extra protection if it makes you feel safe.

Imagine if you had $10,000 in the bank? How would that make you feel? Peaceful? Ahhh… Relaxed? Better than a back rub… Secure? You bet!

Photo by OliBac

Action: Start your Emergency Savings Fund today. Drop a comment when you’ve done this or if you have a question. 

Are you following the NBA this year? Is your team winning? I’m not talking about the L.A. Lakers or any other NBA

Locked Door

What if this was your job Monday morning?

franchise. I’m talking about the players vs. the owners. Or perhaps it is owners vs. owners?

I’m not sure who is to blame for the lockout, frankly I don’t care to follow the drama.

Have the players thought about occupying the NBA headquarters in NYC? Just tell me when the NBA playoffs will start and then I might start watching.

I’m sure that most of the players and owners have enough money to weather the storm, but could you? Could you survive not working your ‘normal’ job for an entire year?

What if one day your boss called and said your job was on hold and to come back next year. What would you do? Continue Reading…