I heard on the news the other day that a very large number of Americans (forgive me for not jotting down the numbers) could not financially survive any longer than a month if they lost their jobs. Living in the 2nd highest unemployment rated county in my state and living in a state that ranks right up there with many of the highest unemployment rates of states, I felt the need to address this. It concerns me, not only for others but for me too!
Our family does have a meager savings account but not one that would last very long. I set out to figure out a way to pump that up a little. A friend had started using the cash envelope system to help her get a better handle on her spending so I started that. (you can learn about this style of budgetting on www.daveramsey.com or www.crown.org ) I figured out what I needed each week in order to pay for weekly expenses like groceries and my church giving. I divided my monthly expenses like utility bills by 4 so I would know what had to go into the checking account each week in order to have enough money in there to pay the bills at the end of the month. A couple things I had not taken into account when trying to budget before was Christmas/Birthday spending, vacation money, and emergency fund . I decided what I wanted to have available for gifts, estimated how much our vacation would cost, figured out what my goal for the emergency fund for a years time would be and added them all together. I then divided that by 52 (weeks/year) to figure out what I should deposit into savings each week. A good savings goal to start with if you have nothing saved for an emergency fund would be $1000.00.
Don’t forget to include more than the minimum on your credit cards bills and make it a goal to get them paid off ASAP. Paying the minimum only pays part of the interest on those accounts and you end up owing the credit card companies sometimes double what you charged to them in the first place.
Here’s the trick: The total of that jibberish above cannot be more than your weekly paycheck!!! If it is, look into your spending habits and see where you can trim until your bills are less than or equal to your income.
We are self-employed. I have a blog article on self-employed budget making- here it is: https://ruralmomof3.wordpress.com/2008/01/10/self-employed-budget-making/
An emergency fund can be (should be) more than a money emergency fund. There are other ways that you can prepare for a time of no income or a time of natural disaster type emergencies. I live in rural America and have access to a generator, have food growing in my back yard, etc. However, anyone, living anywhere can prepare for emergencies of any kind. Here’s some ideas.
- Store extra food. You don’t have to go “survivalist” but it is smart to store extra food. Start out by buying one or two extra things per week. If you don’t have access to a generator, you will want to store extra food that does not require heat or electricity in order to eat it. Dry fruits and nuts, canned meat, canned vegetables, etc.
- Store extra water. Spring water in gallon containers (store brand) is only 70 cents a gallon.
- Store extra first aid supplies.
- Store extra toiletry items.
- If you have kids, store a few items of clothing in the next size up. If your kids have a growth spurt and you don’t have a job, you’ll have a few things to help them get by until things improve.
The excuse of “I don’t have any place to store stuff” is not a good reason to fail to prepare for an emergency of any kind. Under the bed is a perfect place to stash things. What about the very back of your closet where stuff gets lost anyway? Get creative!
Lastly, don’t forget to use what you store. When you run out of something in the main house, example bandaids- go to the store and pick some new ones up. But when you get home, replace the ones in your emergency stores with the new ones and use the emergency ones. This will help keep our emergency stuff fresh and within expiration date.
We need to plan for financial hardship and then pray that it never comes. If you don’t plan for it, it will show up for sure when you least expect it and when it will be the most difficult to make it through.