How I got into couponing is that I was living paycheck-to-paycheck and then the 2008 Financial Crisis happened. It was a scary time because the banks, mortgage companies, car industry and investment companies were all faltering at the same time. Social media wasn’t a thing back then so we watched all the clownery unfold on CNN each night as we watched our 401.k retirement plans go up in smoke. Although, I am a Baby Boomer, the 401.k retirement plans was created while I was still high school. Yes, I hear mostly Generation X dragging all Baby Boomers for today’s mess of Global Warming, Joblessness, 401.k, Student Loan Mess, Terrible Laws on the books, etc. Most of the clownery was already in place by the time my brothers and I graduated high school.
I got into financial trouble because I didn’t understand that my poor financial decisions would impact me much farther down the line with a not so stellar credit score.
One of the best decisions that I did make was to establish an Emergency Fund while paying off debt. Keep in mind that back in 2008, I made good money but I had no idea where my money was going. I would get paid every other Friday and by the following Friday after payday, I’d be broke.
The Federal Reserve says that 40% of Americans don’t have $400 in the bank for emergency expenses and I used to be one of those people that couldn’t come up with $400 in cash.
We live in an “I am Entitled” World without a Cash Emergency Fund.
I am entitled to a $1,000 vacation. I am entitled to a steak dinner. I am entitled to drinks with friends. I am entitled to give my child $200 birthday gift. I am entitled to get a $2,000 refrigerator. I am entitled to spend $100 on a bottle of wine.
Let me raise my hand because I bought things that I wasn’t entitle to because I didn’t have a Cash Emergency Fund.
I think, too, that people get bent around the axel about having an Emergency Fund of six months to year of expenses. Honestly, I think that if you don’t have an Emergency Fund that $400 in cash is the perfect amount to aim for in your bank account while paying off debt. Obviously, after you have achieved your $400 goal, you want to move your goal to a $1,000 and so on.
If you are unemployed or underemployed, it is even more important for you to not spend money and establish an Emergency Fund. This is when you have a honest conversation with your family or friends about birthday or Christmas gifts that you prefer money be put into your Emergency Fund.
It is so important to have an Emergency Fund for your own peace of mind and as your own safety net.