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Break glass in case of emergency (funds)

| April 15, 2020

Almost every personal finance book, pundit, and advisor will emphasize the need for an emergency fund. For those Dave Ramsey fans out there, you all know Baby Step 1 is $1,000 in savings. Baby Step 3 is a full-blown emergency fund with 3 to 6 months of living expenses.

And while it's talked about often, it's an area in which many people struggle.

My wife Amy and I have had some different conversations in the last few weeks seeing what is occurring with small businesses in mid-Michigan and beyond. Being involved in small businesses that work with other small businesses, and having conversations with even more small business owners, it is a little scary. Some businesses will struggle to stay afloat. Some may not make it. Revenues are down. Employees are laid off, especially for ”non-essential” businesses. Incomes in households are decreasing, too. Unemployment paperwork has been filed. Knowing there is a cushion in the savings account and having minimal debt will keep the 3 a.m. wake-ups limited. Not that it won’t happen, but maybe it won't happen every night.

While there will be short-term changes and long-term changes after getting through our current global health crisis, please reflect back on your preparedness for financial (and toilet paper) emergencies. Do you have 3 to 6 months of living expenses in a savings account? If you currently do not, how would having that cushion change your current outlook? And if you do, how would it feel if you had a little more? Or less?

Really step away, walk around through the house for the umpteenth time today and let your mind marinade on those thoughts.

Despite the financial support coming through unemployment, tax credits, and other financial ”gifts” from governmental entities to assist many of us, the American Spirit is built on the ”can do” spirits of individuals not afraid to get dirty nor shy away from physical labor to improve their lot in life. What lessons of our grandparents and great-grandparents have we forgotten?

I suggest we each challenge ourselves to take a little of the American Spirit of those prior generations and solidify our personal financial position.

May this time find you healthy and perhaps more introspective of what is truly important - faith, family, and friends.

We are all in this together,