Speaker 1: Welcome to Before Breakfast, a production of I Heart Radio.
Speaker 1: Good Morning. This is Laura. Welcome to the Before Breakfast podcast.
Speaker 1: Today's tip is to boost your emergency fund by one month.
Speaker 1: Well this sounds like a financial tip, it's actually a
Speaker 1: move to buy time time without being anxious about money.
Speaker 1: An extra month is doable no matter where you're starting,
Speaker 1: so that makes it a good goal. I'm writing this
Speaker 1: and what are to put it mildly highly uncertain economic
Speaker 1: times so far two thousand twenty has reminded us that
Speaker 1: people can make all the right choices and still have
Speaker 1: businesses shuttered for months. It's easy to feel helpless in
Speaker 1: the face of this injustice. But one thing we can
Speaker 1: do is channel this anger into making sure not to
Speaker 1: feel bliss in the future. The best way to do
Speaker 1: that is to build up enough cash that day to
Speaker 1: day crises are just not a big deal. Now. I
Speaker 1: know that a lot of financial podcasts and blogs focus
Speaker 1: on the idea of achieving financial independence. This is the
Speaker 1: point where the income from your investments can cover your
Speaker 1: living expenses. Translation, you would not have to work for
Speaker 1: a living. This is certainly a great long term goal.
Speaker 1: It's really the idea behind retirement, but long before you
Speaker 1: achieve that having enough cash in relatively liquid assets to
Speaker 1: cover a year or so of living expenses can change
Speaker 1: your entire mindset. You wouldn't have to find anything for
Speaker 1: quite a while. In a year, you could probably figure
Speaker 1: out something, especially if you have multiple sources of income. So,
Speaker 1: knowing you had the time without having to dip into
Speaker 1: retirement savings or sell a house or anything like that,
Speaker 1: you could start approach all of life with a new
Speaker 1: sense of freedom and calm. Everyone is at different places
Speaker 1: on their financial journeys, but today's tip is for anyone.
Speaker 1: Whatever the size of your emergency fund, now, how could
Speaker 1: you increase it to cover one more month in a crisis?
Speaker 1: Even an extra month might be helpful. Over the past
Speaker 1: several months, we've seen that some state unemployment systems are
Speaker 1: unable to handle large volumes of claims. Even if you're
Speaker 1: entitled to payments, you might not get them quickly. Policymakers
Speaker 1: might allocate extra funds, but some people stimulus checks took
Speaker 1: a long time to come. An extra month buys breathing room,
Speaker 1: and even if you already have, say, six months of
Speaker 1: expenses in an emergency fund, which is great and you
Speaker 1: have other assets invested, which is also great. A little
Speaker 1: extra might still feel a little better. Tough economic times
Speaker 1: often lead to market swoons. You need the fortitude not
Speaker 1: to sell in a down market, and having enough liquid
Speaker 1: assets that you wouldn't have to can keep you from
Speaker 1: constantly checking on your stocks. Worry consumes all kinds of time,
Speaker 1: and I like to help people save time. So if
Speaker 1: you haven't done this already, figure out what kind of
Speaker 1: cash your household goes through in a given month, then
Speaker 1: figure out how you might find this number in additional resources.
Speaker 1: Not over one month, of course, but over time. The
Speaker 1: first place to look money you're not spending on gas,
Speaker 1: if you're working from home more and taking fewer trips.
Speaker 1: Refunds from vacations not taken can also pad the pile,
Speaker 1: as can cash from meals not eaten out. I think
Speaker 1: every household could try to have some sort of side hustle.
Speaker 1: At very least you can look into one of the
Speaker 1: discounts cellphone providers to save a little bit here and there. Yes,
Speaker 1: there may be some folks out there whose emergency funds
Speaker 1: are too large, they have too much in cash and
Speaker 1: not enough invested. But I suspect that most people are
Speaker 1: not in that position. Well, it's a good goal to
Speaker 1: have an emergency fund that can cover an entire year.
Speaker 1: I know that can seem daunting, but an extra month
Speaker 1: that's doable. Aim for that, and then over time you
Speaker 1: can look for ways to buy yourself more time. In
Speaker 1: the meantime. This is Laura. Thanks for listening, and here's
Speaker 1: to making the most of our time. Hey, everybody, I'd
Speaker 1: love to hear from you. You can send me your tips,
Speaker 1: your questions, or anything else. Just connect with me on Twitter,
Speaker 1: Facebook and Instagram at Before Breakfast Pod that's b E
Speaker 1: the number four, then Breakfast p o D. You can
Speaker 1: also shoot me an email at Before Breakfast podcast at
Speaker 1: i heeart media dot com that Before Breakfast is spelled
Speaker 1: out with all the letters. Thanks so much, I look
Speaker 1: forward to staying in touch. Before Breakfast is a production
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