A few weeks ago we talked about setting financial goals. Did you set any goals? If you’ve yet to set your goals don’t beat yourself up; it’s never too late. Maybe you can take some time this weekend to write some goals down.
When we originally talked about setting goals one of the ideas I gave you was to save $1,000 for emergencies. If you have debt, you may be wondering why you shouldn’t pay off your debts before saving. Or you may be wondering why I chose such a small amount. (Personally, I think $1,000 is a good chunk of money and I could find lots of ways to spend it. But I digress!)
The idea behind saving $1,000 for emergencies is so that you’ll have a buffer when an emergency comes. And trust me, if you’re working on paying off your debt an emergency will come. I’ve been there and it’s not fun.
Track with me for a second. You’ve saved $1,000 for emergencies but all of the sudden the car breaks down (or any number of other frustrating things). Normally when something like this happens you would pull out the plastic and charge it or run and get a payday loan because you didn’t have a buffer. Since you’ve saved $1,000 you will now be able to pay cash for the car repair and won’t have to pay for it later with your other debts! (Won’t that be a wonderful feeling?)
When you plan for emergencies you enable yourself to move forward in your financial journey instead of taking two steps back.
Maybe you’ve been in this same situation where you’ve saved for your $1,000 and then an emergency comes and you have to use that cash. Then, you save again and there’s another emergency. This can be a frustrating process but I want to encourage you to keep trucking on! Why? Even though you think you’re not moving forward you’re actually making progress in your financial journey. (1) You’re not adding to your debt (High five to you!) and (2) you’re training yourself to pay cash.
If you feel like this process is hard I want to encourage you to keep driving the train through that dark tunnel. You’re going to see that small crack of light. It will get closer and closer as you keep trucking forward and before you know it you’ll be at the end of the tunnel! You can do this!
Tshanina Peterson blogs at Thrifty T’s Treasures where you can follow her journey of living a thrifty lifestyle.