Did you know that the average family is only two weeks from being homeless? pretty scary... Can I say this just makes me grateful that my wife and I have worked so hard to build up a cushion in our savings separate from my investment accounts. That way if we need anything in a hurry we have it. This also helps me sleep good at night!
If you do not have an emergency account I suggest you start today building one up! Here are a few pointers I have on building an account, because really it is much easier than you think:
1. Look out for #1. Most of the time we get a pay check and think. "Ok I owe the bank $1,000, Comcast $63, American Family Insurance $145, and so on." I challenge you to change your thinking. Put yourself first! Pay yourself before you pay the bills. Don't pay yourself to go out to dinner or to buy the latest Transformers - that will just get you into even bigger trouble! Pay your savings and investment accounts first. You may have to stretch for the first little while, but after a few months I promise you will never miss that money.
2. Out of site out of mind. Don't keep your savings $$$ in a place that you will be tempted to spend them. I keep mine in an Orange Savings account through ING Direct. This is an online savings account linked to my bank account. The greatest part about the account other than it isn't visible on my bank account statement is that anytime I want transfer money out there is a two day delay. Sounds like a bad thing right? It isn't. Two days is just long enough and difficult enough to get to that I really don't like to transfer $$$ over.
2. Get on Auto Pilot. Referring to pointer number one an easy way to force a painless payment to yourself before everyone else gets their cut is by setting up automatic withdrawals. I have mine setup for the day after I get paid. By the time I get on to balance things out with my payroll the deposit has already been taken out and I don't even miss a thing.
These are three things that have worked to help us build up a great security blanket. If you have any others please share. I love new ideas.
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