If Murphy came and paid you a visit today, could you cover an emergency? Canadians are spending $1.67 for every dollar they earn and over half of Canadians are $200 or less away from not being able to pay their monthly bills. These statistics are alarming, given that 8 out of 10 people can expect to have a major negative financial event in any given 10 year period. With that in mind, if you haven’t topped up your emergency fund in a while, it's a good idea to look over your financial plan and see if your emergency fund has kept up to date with your monthly expenses.
I was coaching a mother who had two young kids the other day. She connected with me because she had just totalled her car and wasn’t sure how much she should spend on a new one. She was a saver and had managed to put away $15k for a rainy day like this, which was more than enough to buy her and the kids a nice used vehicle.
Anyone that’s a home owner can understand how frustrating maintaining a home can sometimes be… especially older homes. Maintaining a home is not unexpected and should be included in your monthly budget… A flood, leak in the roof, or fire are all unexpected events that we hope against, but should be prepared for. These are just a few of many things that can happen to anyone. If being inconvenienced isn’t enough, insurance claims can sometimes take months to be paid out! Having your emergency fund will keep you afloat and from having to borrow during a crisis like this.
A job loss isn’t the end of the world and can actually be a new beginning! Having a fully funded emergency fund will keep you on your feet and in good spirits while you start to work towards your new journey.
The Next Recession
Have you ever turned on the news and it sounded more like Chicken Littles’ "The Sky Is Falling" than reality?.. Ya, like almost everyday! There are two things you need to understand… One, news networks are 'for-profit' businesses. Two, bad news sells! During a recession, things definitely start to trend downward, especially in certain industries. Having a fully funded emergency fund will help cover you if there is a job loss or if your company cuts hours.. Hopefully you won’t even have to use it, but it’s there if you need it.
Get On a Plan
We want to plan for the best but be prepared for the worst. Not having a plan is what I call the "ostrich" approach to life. Putting your head in the sand and ignoring the world around you never ends well! It’s time to step up and get on a plan with your finances. Connect with a coach today for a complimentary coaching session.