Be Prepared

Be prepared!

This motto is on that has been used by the Scouts and Guides organization for years and there is a reason they have stuck with it – because it is really great advice! I meet so many people in my work that have found themselves in trouble for one reason or another. It is really hard to plan for the curve balls that life can throw at us but we can be a little prepared.

A rainy day

I know there are many of you out there that might be simply struggling to make ends meet or are simply living week to week and using all of your income as you go. Even if you are just getting by, you need to have some plans in place should you be faced with a bump in the road.
There are many things that can happen in everyday life that can really derail our financial strategy. If you are working hard on paying off debt or just working hard to manage your day to day expenses, an unexpected bill can really hurt.

It is often these little bills that can send us off on the wrong path. We might be exercising caution and living within our means when suddenly something happens. It might be that the car needs a big service or something breaks down around the home or we have a bad run with sickness and suddenly have lots of small bills to pay. Using our credit card or some other form of short term debt can seem like an easy answer.

However, if we work on a plan in advance, we can have some money set aside to cope with these types of situations. If you approach your bank you may be able to open an account with little or no charges if you already do business with them. Then set up a direct debit to come out every week. A good starting amount is $20 per week. This is easily achieved as it is small enough not to be missed from most budgets. The weekly payments will soon build up and before you know it, you will have accrued a nice little sum in your emergency fund.

Now it is tempting to touch this nest egg as you see it building but be strong. This money is here for you to help you out. You are taking care of yourself and your family by creating this. It is not for me to say when and how you should use this money but you need to be certain that what you use it for is a necessity and not a want. You should also keep it for unexpected expenses and not use it to pay a bill simply because you have not set aside money for this. It will not create good financial habits if you do this.