Wow, all I can say is that this challenge is flying by, as is the month of January. Can you believe how fast it's going?
Did you complete last week's task? Did you come up with a cheap or no-cost way of encouraging a friend? I'll tell you mine. My way of encouraging a friend was to send an actual notecard through snail-mail. I need to do this more often, just because. Yeah, it's a little old-fashioned, but it's a really easy way to show someone that I'm thinking about them, enough to write out a card and send it in the mail.
This week we're going to talk about how to navigate through setbacks during this savings challenge. Maybe up to this point, you've been doing great. You're saving a lot, not spending on purpose, and WHAM! life happens. Your car breaks down or your HVAC goes out or your roof leaks. You know, life. How do you handle the emergencies that seem to crop up just when you're starting to make headway saving money?
Today, I offer 4 ways to navigate setbacks in your finances:
1. Don't panic. Seriously, this is not the first time an unexpected hazard has come up, and unfortunately, it won't be the last. The worst thing you can do is freak out and give up because you feel like this "saving money thing is not working anyway, so I may as well quit." Don't do it, darling! Do this instead...
2. Gather your resources. After you've regained a calm(er) state of mind, sit down and really assess the situation. What is actually wrong? In other words, write out the emergency or money challenge you're facing at the top of a blank sheet of paper. Now underneath that, begin to brainstorm all the ways you can knock it out. Maybe you have a couple hundred dollars stocked away in a savings account. Or you might have the opportunity to work overtime. List every little and large idea you come up with that will help you fund the emergency. It doesn't look quite as scary once you have a plan of attack, right?
3. Use your actual emergency fund. I'm one of those people who likes to have an emergency fund for my emergency fund. Please tell me I'm not the only neurotic one! Ha! But there are times in my life, when as much as I hate to, I have to dip into my emergency fund and use it for just what it was intended for--an emergency. Having an emergency fund is probably the best way to navigate rough patches in life. That's why Dave Ramsey recommends it as the very first "baby step" in his Financial Peace program. Having an emergency fund turns an emergency into not-quite-an-emergency. You use those designated funds to pay for your emergency, and then as quickly as you can, you rebuild your emergency fund to use on the next--you guessed it--emergency.
4. Whatever you do, don't quit your savings journey! This is my favorite tip, and one that I'm continually reminding myself of too. There have been many times when I've been tempted to stop saving for my dreams and goals in life, but pushed myself to keep doing it anyway. I wanted to use the money for anything else, but I kept at it. Let me tell you just some of the things that I've been able to do with my savings: I bought my first computer out of college--with cash. I paid off my student loans 7 years early by using money from my savings account. I was able to quit my part-time job and stay at home with my son and build my business because of our family's savings. And sometime this week, I plan to schedule a consultation for that LASIK vision surgery I've been wanting. I am so glad I didn't quit saving when I was tempted to. I know you will be too! Save on, friend.
Week 4: Task 1: Do you have an emergency fund? If not, consider starting one TODAY, using your savings from this challenge to go into it. If you have an emergency fund, take some time to analyze it. Does it need more money? Are there any emergencies in your life right now that could be taken care of by using your emergency fund?
Is there anything you would add to this list that helps you navigate a money setback? I'd love to hear about it in the comments below!