Fight Interest

As I noted in the blog post The B-Word, I got into financial trouble when I was faced with an unplanned expense and had no savings, or financial foundation.

How is your financial foundation?
Probably not where you need it to be. Most financial advisers recommend that you have three to six months worth of living expenses in savings or liquid investments. You’ve done a budget so you know how much that is. How close are you? Does the number seem overwhelming? It likely does when you’re living paycheck to paycheck.

How do we get there?
I like to call it Baby Steps. Just as a baby crawls before it learns to walk, you have to start crawling. Try this to start:
For the next month, take one dollar per day and put it in an envelope. At the end of the month you should have about $30 in that envelope. Take that $30 to a local bank or credit union and open a savings account. Say no when they ask you if you want an ATM card.

Next month, push for a little more. Try $10 per week. What we’ve done is set a bottom threshold (crawling) and from there we work toward incremental improvement (pulling up, standing, then walking). Try to modify your spending habits over time in order to have more to save.

Let me know how you’re doing!