Do You Have A Financial Safety Net? (And How To Build One)

Do you have a financial safety net? It’s something worth thinking about and setting up. What will happen to you and your loved ones if you lose your job for a few months? What if you get into an accident that may prevent you from earning a living? Or what if some unexpected expenses come up. Do you have anything in place to make sure the bills continue to get paid and your family is taken care of? 

 

If not, now is the time to get started. But where do you actually start? Having three to six months’ worth of living expenses tucked away in an interests-bearing account is a good beginning. Figure out what your family needs to comfortably live on if all income stops. Then start saving as much money as you can until you have built up this safety net. 

 

Put the money you usually spend on going out to eat, going to the movies, buying the newest TV and Tech gadget and the likes into your savings account until you’ve saved enough to have a comfortable cushion. Take make this step go even faster, add any bonuses, tax refunds etc. as well. 

 

Don’t just stop there. Make it a goal to add to your safety cushion as you can and come back and revise your numbers from time to time. Your living expenses may go up or down over time and you can adjust how much you need to set aside in quickly accessible money accordingly. 

 

Life and disability insurance are another important part of your financial safety net, as is your retirement money. Do you have a plan in place to continue to cover your living expenses (or those of your family) when you can no longer work? Call up your insurance agent and go over your current coverage. Make sure the insurance you’re paying for will pay out what you need and if not, make adjustments. 

 

Once you have those two parts of your safety net firmly in place, consider investing any additional savings into higher interest-bearing accounts. While you may not be able to access any money invested here right away, it will come in handy when you’re dealing with a long-term financial emergency or are ready to retire. The plus side is that there are plenty of investment vehicles out there that will get you a much better return than your plain savings account at the bank. Talk to your financial adviser and come up with a plan that’s right for you, your family and whatever the future may hold. 

How To Plan For Unexpected Expenses

It’s just a matter of time before it happens. The transmission blows on your car right around the time your daughter needs braces and your washing machine decides to call it quits. All of these are unexpected expenses and something we need to deal with throughout life. 

 

Being prepared as much as you can is your best bet when live throws you a financial curve ball. 

 

Do your best to anticipate upcoming expenses. If you’re driving an older car, or your dishwasher has seen its better days, start saving up to replace the item. You may also want to start keeping an eye out for good deals on the replacement. 

 

An even better strategy is to have an emergency savings fund. Set up a savings account and add to it monthly. Use it only for completely unexpected expenses. Make sure you know what’s in the account. And once you have to take money out of it replace it as quickly as possible. 

 

This brings us to a good point. Here’s how to recover quickly after that purchase. Go over your budget (you have one of those, right?) and look if you can temporarily cut back on some things. Stop ordering Pizza every Friday night and make your own at home. Skip a night out on the town and watch a couple of movies on Netflix instead of going to the theatre. 

 

Use the money you’re not spending for the next few months to refill your emergency fund. For an extra boost, work a few hours of overtime, do a few freelance projects or temporarily pick up a part time job to get back on track fast. 

 

But what do you do when the expense comes up before you had a chance to set up the emergency fund? Take a deep breath and assess the situation. Can you make do without the item for a little while? Just long enough to scrape together the funds to repair or replace it. If it’s the dishwasher, that’s easy. You can wash dishes by hand for a little while. If it’s the fridge or the car you rely on to get you to work each day, that’s a different story. 

 

If you need the item that broke, evaluate if it would be less expensive to repair than replace. Even if it isn’t the perfect solution, it may get you to work until you can safe up for a different car. Shuffle your money around and if there is no other option charge it to the credit card and get to work. Your one and only goal right now is to pay off that expense. If you stick every penny of discretional income in, it won’t take you long. 

 

One your bills and credit cards are paid off, do what you can to get that emergency fund set up. Because you know something else will break down the road. 

Put Your Savings On Autopilot

Putting a little money away for a rainy day isn’t always easy. You may have some good intentions, but at the end of the day, there just isn’t any money left. Somehow whatever you make is spend before you make it to the next paycheck. 

 

Start by making a personal budget. Take a look at what you bring in each month. Next, write down your fixed expenses. These are things like rent, car payments, utilities etc. Figure out how much you need each month for groceries and other essentials. This is your bare bones budget. It’s good to know what you need to get by each month. 

 

Next, it’s time for a little bit of math. Start with what you bring in each month and subtract all your core expenses. What you’re left with is your discretional income. This will pay for entertainment, clothes, getting your nails done etc. And from here on out, part of that discretional income will go into a savings account. 

 

Pick a number you’re comfortable with. Maybe that’s just $20 per month, maybe it’s $500. Put it in your budget and treat it like any other bill. It won’t take you long to get into the habit of setting aside that money for savings. 

 

To make it even more hands-off, talk to your bank about setting up a separate savings account. Then set up an auto-deposit to have the savings transferred to the new account as soon as your pay check comes in each month. If you don’t see it, you’ll never miss it and your savings will run on autopilot. 

 

Don’t forget to audit your savings from time to time. Take another look at your budget. Can you increase your savings a little more? Another great way to boost that savings account is to take any extra money – thinks like birthday cash, tax return, bonuses etc. – and put them straight into the savings account. Again, you won’t even miss the money, but it will help you build up your savings quickly. 

 

Make sure your savings are sitting in an interest-bearing account. Since you won’t be touching this money unless it’s a dire emergency, you should be able to earn at least a little interest. Talk to your banker about your best options and start putting your savings on autopilot. 

 

One last tip: Talk to your employer about matching 401K funds. You may be able to get a contribution from the company you work for towards your retirement savings account. 

Why You Need To Keep A Household Budget

 

We work hard to earn a living. We should make sure we spend the money we bring home wisely. That’s where a household budget comes in. It’s a good tool to see at a glance what we have coming in, what’s going out (and what that money is paying for) and if there’s anything left at the end of the month to put into savings. 

 

Before we dive into exactly what a budget can do for us, let’s consider for a minute what will happen if we’re not tracking income and expenses. We may end up spending more than we’re making in a given month (or two, or three). Over time that can put us into some pretty hot water financially. We may also spend a lot more than we’d like to believe on things like eating out, going to the movies or new clothes. 

 

Having a budget gives us more control over where we want to really spend our hard-earned cash. Maybe that’s dinner and a movie, but maybe it isn’t. Wouldn’t it be nice to have an actual choice? 

 

It Tracks Where Your Money Is Going 

 

A budget simply tracks your money. You record where the money comes from each month (your income) and then write out everything you spend it on, starting with your regular monthly bills like mortgage or rent, car payments, utility bills etc. What’s left after all the bills are paid is your discretional income. 

 

Helps You Identify Things You Waste Money On 

 

Having it all in front of you in black and white helps you identify things you’re wasting your money on. 

 

It makes you reconsider if you really want to spend well over $200 a month on Cable TV or $150 on your large cell phone plan. Or how about that yearly magazine subscription to something you no longer read? Go through your expenses and reevaluate if this is REALLY how you want to spend your pay check. 

 

Allows You To Be Proactive About Savings 

 

Saving money without a budget is hard. We go in with the best of intentions at the beginning of the month, but somehow there isn’t anything left at the end of the month. 

 

A budget gives you a chance to be a bit more proactive. Set aside some money for savings at the beginning of the month, even if it’s just $20. Put it in the budget as a regular expense, just like you do with your other urgent bills. If you need to, open a separate savings account so you’re not tempted to spend it. 

 

Ensures You’re Not Spending More Than You’re Making 

 

Most importantly, your budget will keep you on track and help you make sure you’re not spending more than you’re making. And I don’t have to tell you that that’s pretty important for your financial wellbeing. 

Confidence Is Your Secret Weapon To Building The Live Of Your Dreams

It’s time to wrap up this 7-article blog post series about getting what you want out of live. We’ve covered a lot of ground already this week and I’m sure you’ll surprise yourself with how much progress you make going forward. Before you know it, you’ll have the life of your dream and start to reach those big lofty goals, without the feelings of guilt holding you back. 

 

In this post, on this last post in the mini challenge, I want to leave you with some tips and advice that hopefully help you get there. The key to success in any area of your life is confidence. I like to think of it as a secret weapon that helps you keep doubt and guilt at bay. It’s your very own super power that you can (and should) develop and nourish over the coming weeks and months. 

 

Starting to make progress and taking these little baby steps that we discussed a few days ago can be a great confidence builder. That’s one of the reasons why I got you started on them right away. Don’t be afraid to go back to taking small baby steps whenever you feel like you’re losing confidence in yourself or stressing out about how monumental the task you’ve set yourself is.

 

Setting and reaching milestone goals are another great way to break it down and boost your confidence in yourself. If your goal is to lose a large amount of weight, break it down into 10-pound increments and focus all your energy on reaching that next 10-pound loss. Celebrate your successes. The same works when you’re paying of debt. Start with one credit card for example and get it paid off. Reaching those smaller goals are a great confidence booster. 

 

Tracking your overall progress is another great way to feel like you’re making progress. Sometimes it’s hard to see how far you’ve come in the day to day activates of regular life. Chart your progress on a calendar, a large graph hanging on your fridge, in a document on your computer, or even in an app on your phone. Look at how far you’ve come whenever you feel like giving up. It’s nice to have a visual reminder that what you’re doing is working and giving you the results you want and need. 

 

Last but not least, find some cheerleaders to cheer you on and tell you how well you’re doing. This could be a close friend or family member, or it could be a group of like-minded people that you connect with locally or online. The beautiful thing about the internet is that we can find people with the same or similar goals in lots of groups and forums. Our very own Facebook group is a great place to connect, compare tips, ideas, and results, and of course celebrate each other successes and serve as a source of encouragement.

 

The most important part is that you keep going and keep working towards crafting the life you’ve always wanted. Good luck and keep up the great work. 

Watch Out – Those Guilty Feelings Will Try To Sneak Back Into Your Life

The previous blog post was all about taking baby steps and making progress. The secret to reaching any goal is to just keep taking those baby steps and adjusting your course as needed. Sounds simple enough, doesn’t it? Unfortunately, there’s always something that will throw a wrench into your plans, potentially halting your progress. Today I want to share one of those with you. It’s something you should watch out for and be prepared for. If you know it’s coming, it’s much easier to prevent it from stopping your progress. 

 

I’m talking about guilt. We’ve looked at the guilt that’s holding you back throughout this 7-day mini challenge. Not only does it prevent you from starting to go after your dreams in the first place, it also keeps trying to sneak back into your life. You’ll notice those little negative thoughts popping back in your head after the first excitement of making progress and going for it dies down. That’s when you have to be prepared so these feelings of guilt or self-doubt don’t derail you. 

 

I’ve mentioned how helpful a journal can be when it comes to self-reflection. It’s also a great tool to help you spot guilty feelings popping back up. If you get yourself to journal regularly about your feelings and your progress, you have something to look back on. You have a record of what you’re doing and how you’re feeling. You can then look through your daily entries and find those instances of guilt quickly. 

 

As we’ve discussed before, it’s easier to get over the guilt and in this case prevent it from taking hold when we know what it is and that it’s coming. When you know what you’re feeling bad about, you can find arguments and proof against it. Reminding yourself of the positive impact the changes you’re making will have on your life also helps you stay the course. 

 

For example, that piece of cake may be tempting you and you may feel guilty about not eating the confection that your aunt so lovingly prepared. Or you may feel guilty about letting perfectly good food go to waste. By reminding yourself that your health will be much better and that you’re able to run around the park with the kids, you can quickly overcome these feelings of guilt. The same holds true if you’re feeling guilty for not going out to lunch with your friends at work, or not buying your kid the latest pair of designer sneakers because you’re being financially responsible. Do you see how this works? 

 

Additionally, you have something to show you the progress you’ve been making and the positive changes you’re already experiencing. That can be a great confidence booster, which will be important as you continue your journey well past the end of this challenge. In fact, it’s something we’ll take a closer look at in the next blog post. Stay tuned. 

Take A Few Baby Steps Toward Your Big Goals

Big goals can be scary. It doesn’t matter if it’s losing a significant amount of weight, paying off a large chunk of consumer debt, or changing careers. When we look at those big goals, we get intimidated. We put off working towards them because we either don’t know where to start, or because the task simply seems too daunting. Today we’re going to tackle that issue and start making progress. 

 

The key to reaching any goal, no matter how big or lofty, is to get stared and take baby steps. You can reach any goal and make any change if you consistently take small steps towards it. My goal for you today is to motivate and inspire you to take a those first few baby steps toward your big goal. 

 

The best part is that you don’t’ have to have it all figured out to get stared.  You don’t need to know exactly what you’ll have to do at every step along the way. You don’t need to come up with a plan to pay off your entire credit card debt. You don’t have to figure out how exactly you’ll lose all of those 65 extra pounds. You don’t need to know what it will take to buy your dream home. And you don’t need to know everything there is to know about opening and running your own bakery. 

 

Today is all about making a little bit of progress and getting started. This gets you over that initial hurdle and builds momentum. It will also help you realize that you can figure out the rest along the way. Ready to take those first few steps right now? 

 

Start by looking at your big goal, the changes you want to make, or what you want to get out of life. Know what your end goal is, but don’t worry about everything you need to do to get there. Just make sure you have an idea of the general direction you want to head in. At this point, it’s fine to simply decide that you want to lose some weight and improve your health, or pay off those credit cards and student loans to give yourself some financial breathing space. Go that goal in mind? Great! 

 

Now come up with one or two little things you can do right now that help you move into the right direction. It doesn’t matter how small those steps are. They may seem insignificant when you look at the big picture, but they will quickly add up. Most importantly, they get you started. Let’s look at a few examples of what those baby steps may look like. 

 

If your goal is improving your health and losing weight, your baby steps may be to go for a 10 minute walk each day, or replacing soda with sparkling water. Maybe it’s trying some new healthy recipes and getting into the habit of eating a salad or steamed veggies with two meals per day. If the goal is to save money or pay off debt, it could be to have $20 per month auto drafted into a savings account or to pay the principal of your debt. Or maybe it’s going through bills and cutting out some monthly extras like canceling magazine subscriptions or downgrading your cellphone and cable bills. Maybe it’s skipping the coffee shop in the morning and packing your lunch. Find one or two places where you can save a few dollars and start applying them towards your financial goal. If you want to change careers or start your own business, read up on what you need to do or find someone to talk to who’s done what you want to do for direction. In short, do something today that will move you in the right direction. Go do that and then stay tuned for the next post. 

Forgive Yourself And Start Loving The Real You

 

It doesn’t matter what’s holding you back from doing what you really want to do. Once you’ve started to figure out what you’re feeling guilty about, the next step is to work towards forgiveness and self-acceptance. Here’s the thing that most people don’t realize. You have to love the real you before you can start to make the small changes that lead to big success. If you’re ready to start crafting and molding the life of your dreams, start by loving yourself first. 

 

We are all human beings. We make mistakes, we mess up, and we don’t do what we set out to do. When we learn to forgive ourselves and love enough to try again, we learn and get better. That’s why this step of forgiveness and love is so important. Start by examining what you feel guilty about. Look at what you’ve done and what you haven’t done to get you closer to your personal goals. 

 

Embrace the good stuff and feel proud about what you’ve already accomplished. Acknowledge where you messed up and didn’t follow through. Forgive yourself for it and accept it. Maybe there’s an important lesson you’ve learned from your mistakes. Maybe it was simply some much needed practice to set you up for future success. 

 

At the end of the day it’s up to you if you let your failures and missteps derail you and keep you from living the life of your dreams, or if you see them as the learning opportunities they are. It’s a matter of perspective. 

 

Yes, this is easier said than done, but if you can come from a place of love and forgiveness, it is much easier to see things in a positive light. Get in the habit of looking for the best and most positive in each situation. Be kind to yourself and don’t condemn what you do or did. Forgive yourself and keep working towards those positive, and possibly life changing goals. 

 

It helps to start small. Find a little something you did today that you aren’t proud of. Forgive yourself and see what you can learn from the experience. Then build on that one positive and forgiving act and use the energy to do it again, and again, and again. When you actively work on loving yourself and forgiving yourself, amazing things start to happen. Most importantly, you start to build a positive habit that will help propel you forward. 

 

As an added bonus, you’ll feel better about yourself, gain a ton of self-confidence, and end up with plenty of positive energy to tackle whatever life throws your way. Isn’t that worth making the effort to forgive yourself and love the real you? 

Dig Deep And Find The Reason For The Guilt

This is day three in our seven-day mini-challenge and it is time to dig a little deeper and get to the root causes for your guilt that’s holding you back. After all, you can’t work on something and start making improvements until you know exactly what it is. Digging deep and examining your feelings can get a little uncomfortable. Don’t let that deter you. Keep pushing through. It is well worth it and you’ll feel much better once you’ve faced your fears and dealt with your feelings of guilt. 

 

Find a quiet place where you can think for a while without being interrupted. If you prefer, you can work through your feelings in writing using a journal or the likes. Some people find this helps them focus and stay on track. Otherwise, thinking through it can work just as well. If you find that you have a hard time pinpointing where your feelings of guilt are coming from, it can be helpful to talk it through with a trusted friend. Ideally this is someone who know you well and can guide you along the way. Encourage them to ask probing, open-ended questions until you get to the bottom of the matter. 

 

Let’s say you have been thinking of doing a little freelance work as a writer while you’re home raising your young children, but a feeling of guilt stops you from taking the first steps to give it a try. When you sit down and start to examine these feelings you start out with the idea that you will take away time you could spend with your children. As you think more about it this and start to imagine how it could work, you realize that you have time while they are napping or in preschool and that you will have even more time on your hands once they start school. 

 

Digging a little deeper, you realize that you’re worried about how getting back into your old profession could be perceived by those around you. Your spouse may feel like you don’t have enough time for him, and the neighbors may think that you’re a bad wife and mother if you focus on your freelance career. By facing these thoughts, you realize how silly these fears are. In most households both parents work and you would have the added benefit of a flexible schedule. 

 

You start to feel a little better about the whole idea, but there’s still a knot in your stomach. There is one more feeling that’s holding you back and it’s the thought that’s manifesting as guilt. You realize that what you’re really worried about is that you won’t make it. You’ve been home for a few years and haven’t done much writing, freelance or otherwise. What if no one will give you a project to work on or publish your writing? This right here is the real issue and the one you can now work on. 

Time For Self-Reflection And Finding The Guilt That’s Holding You Back

We are taking a look at guilt and why it can hold us back from doing the things we want to do. In the last post we started out by looking at what guilt is and how it holds you back from living the live you want to live. In order to break through and start making some series progress, you have to let go of the guilt. That’s what we’ll cover today. 

 

First Things First…. Find The Guilt 

 

The first step in this process that I’ll walk you through over the coming days is to find the guilt. It’s obvious, isn’t it? If you don’t know exactly what you feel guilty about, you can’t come up with a plan to work through it and let go of that guilt. Of course, that’s easier said than done. If it was easy, we wouldn’t go through a 7-Day process to stop holding back and letting go of the guilt. 

 

It’s important that you’re committed to discovering what’s holding you back and what you may be feeling guilty about. It’s important that you’re brutally honest with yourself. It’s not going to be easy. It is however going to be helpful, eye-opening, and very productive. 

 

Taking Time For Self-Reflection 

 

Start by giving yourself some time to think. We live in a loud and busy world that’s full of distractions. It’s hard to hear yourself think sometimes, isn’t it? It’s also easier to stay busy and keep plugging away than it is to stop and take some time to reflect. 

 

Find a quiet place, get comfortable and let your mind wander. Start to think about what you want to accomplish. Take a look at what’s holding you back. What thoughts or tasks start to make you feel uncomfortable when you think about them? What part of the journey gets your stomach in a tight knot? What is causing doubt to creep in? Pay attention to all of it and see if you can start to pinpoint this feeling of guilt and where it may be coming from. 

 

A Journal Can Be Helpful 

 

A journal is an excellent tool in this process. Grab a notebook, open up your word processor, or get a new journal and start to write your thoughts down. Putting it on paper can be very clarifying. It forces you to focus and organize your thought processes. It also gives you something to come back to and read later in the day or a bit down the road. This reading of your thoughts and what’s going on in your head can help you discover underlying causes as you “read between the lines”. Give it a try and see if you find journaling helpful in this process. 

 

Make A Plan To Discover Guilt Going Forward 

 

Last but not least, it’s important to realize that this will be an ongoing process. New feelings of guilt will pop up from time to time. Be on the lookout for them so you can address them right away. Again, journaling is a great tool for this. At the very least, be aware and listen to your mind and thoughts going forward.