It is fantastic to find a way to use a financial setback for good.
Financial setbacks are a common part of everyday life. The following upsets to our financial conditions are common: an unexpected layoff occurs on the job, a roof starts to leak, a furnace blows out at the start of winter, the transmission on the car dies on the highway. Each of these instances will put a strain on an existing budget. Most of us are not overjoyed when we suffer a financial setback. However, these types of financial hardships do not have to be permanently devastating. Instead, we can look at these financial hardships as an opportunity to start improving our financial conditions.
I like the Six Month Solution to these types of issues. By this, I mean that one of the best ways to keep a financial setback from causing a permanent hardship is to have sufficient savings to cover all living expenses for six months. Included in this would be the following:
- rent or mortgage
- all utilities
- car payments including insurance
- tithes for church
- cell phone bill
- laundry and dry cleaning
- pet food and pet supplies
- meals out
- hair or nail salon visit
- anything you spend money on each month
A six-month bank account will also provide you with sufficient funds to deal with any of the financial setbacks listed above without a devastating lifestyle effect. I recognize it is not easy to set up a Six Month Account. But alas, so many things in life are not easy.This is one of those situations where you just have to put on your big girl panties and do the hard work. Start saving a little at a time from each paycheck. If you can start off by putting aside the minimum required by your bank or credit union to open a savings account, do that. If not, start saving a small amount each paycheck that you can save each payday, it can even be one dollar. If you are a disciplined person, put the money aside until you have the minimum your bank or credit union requires to open the account. If you do not have the discipline, put the money in the bottom of a cup or sandwich bag, fill the cup or sandwich bag with water and freeze it. For most people, the work of unfreezing the ice cube of money will keep one the money safe until enough as been saved to make the trip to the bank or credit union.