36 days! That was the historic amount of time that our federal government was shut down at the direction of the President, and it may resume in a matter of weeks! Starting on day one, there was an immediate impact on the livelihood of Americans across the country. As bills piled up, the inability of federal workers to pay their bills caused credit scores to plummet, and this is only one of the tragic side effects of the shutdown. Those who depended on federal funding for critical programs suddenly saw the influx of dollars come to a halt leading to the layoff of countless Americans.
The media was flooded with stories of individuals at risk of losing their homes, those unable to pay for medication and an unheard of increase in traffic at food pantries everywhere. In light of this disheartening trickle down effect, I couldn’t help but think about the financial ruin that so many have faced after not receiving a check for two pay periods. This is the perfect time to re-emphasize how important it is to develop emergency savings.
Statistics show that most are one to two paychecks away from homelessness. How can we reverse this trend? Surely it won’t happen overnight, but there are immediate steps that can be taken to start building an emergency fund just in case a government shutdown or some other catastrophe happens without warning.
- Set a goal to put away at least three to six months of living expenses.
- If you haven’t already, open an account specifically designated for emergencies. This account is separate from your traditional savings account.
- Each payday, be sure to pay yourself first. Determine a reasonable amount that you can put away and stick to it. If you get a raise or bonus, contribute a portion of it to your emergency fund as well.
- Consider creating an additional stream of revenue. Whether it’s picking up a part-time job for monetizing a talent, extra income is a great way to fund your emergency fund.
- Make an appointment with a financial advisor to get a full and clear picture of your financial situation. Take the time to set financial goals and lean on your advisor to ensure that you remain committed to the goals you’ve set.
- Once you have a solid emergency fund plan in place, explore the opportunities of building an investment portfolio with your financial advisor. Remember, you don’t have to be wealthy to get started investing in the stock market. Start small, then grow!
If you were not personally impacted by the government shutdown, consider yourself fortunate. You never know what type of emergency can come about that can turn your financial situation upside down, so start preparing today!
Connect with Delta Jones-Walker and Atled Financial on Facebook, Twitter: @Atled_Financial and LinkedIn! To schedule a complimentary consultation or a presentation to your group or organization, call 219-513-3710 or email djwalker at atledfinancial.com and mention this column. Topic ideas for this column are welcome!