Hey my friends. 
Preparing For Emergencies
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Assuming you're at least moderately in touch with reality and haven't been living under a rock, you've likely heard the dismal statistics about the average American saving behaviors (..or lack thereof):
"According to a 2016 GOBankingRates survey, 69% of Americans have less than $1,000 in their savings accounts. What's more, 34% have no savings at all."
CNBC"Many Americans are not prepared for retirement. In fact, 'nearly half of families have no retirement account savings at all,' the Economic Policy Institute (EPI) reported."
CNBC"Around half of American households have no retirement accounts at all. No 401(k)s, no IRAs, nothing. You might think that’s because they’re all expecting pension income in retirement. In fact, according to the Government Accountability Office (GAO), around 29% of households age 55 and older have neither retirement savings nor a pension."
SmartAssetI know. Worrisome, right?
The good news is that we can always change our circumstances. Just because you may not have any or enough saved today, doesn't mean it has to stay that way.
One of the most important things you can do for your emergency fund is to..
Automate Paying Yourself First.
Many employers and banks offer the option to split your paycheck into different deposit accounts. Make the commitment to set aside a certain dollar amount or percentage per paycheck until you reach your target goal. Automating this and paying yourself first prevents this "extra" money from being spent on other, likely frivolous, things. Once again, I gotta recommend You Need A Budget (YNAB) for getting a better handle on where your money goes each month. I hated other types of budgeting but I absolutely love YNAB. Additionally, I use Personal Capital to aggregate all my accounts and to track my monthly net worth, income, expenses, assets, and liabilities. You can also set savings goals and it will keep you updated on your progress.
If you are having a hard time building up your emergency fund, try these steps:
- Write down a measurable goal (ex. I will have $10,000 saved by December 31st, 2017.), sign it, and put it somewhere that you'll look at it every single day. Make a conscious effort to remind yourself of this goal daily and what specific actions you are taking every single day to get closer to achieving that goal.
- Make a list of all monthly expenses and call to negotiate rates with each company. (Ramit Sethi is a wizard at doing this. You can also get his book here.) Ask to be transferred to the customer retention department if needed. Companies would rather keep you as an existing customer than pay high costs to obtain a new customer. Leverage this and threaten to cancel if needed. Set reminders on your phone of when to call again to negotiate the next promotional rate before you are charged the full amount on the next regular billing cycle.
- Eliminate certain expenses altogether. (We "cut the cord" on cable TV a few years ago and haven't missed it since. Instead, we set up Kodi and enjoy watching almost anything for free! However, since my commute time to work is lengthy, I consider my SiriusXM a necessity for my sanity. I keep my subscription cheap by haggling them down every 5-6 months.)
- Call up your credit card company to inquire on current promotions. I called Discover and got a promotional rate of 0% for a full year just by asking. Also consider doing this in conjunction with a balance transfer if you have credit card debt on another account with a high interest rate. The transfer may justify the fees but do your homework first.
- Work overtime if possible or start a side hustle (Start crushing it on Steemit!). Aim to make the best/most efficient use of your time whether in the office or on a side project.
Building up an emergency fund before tackling other parts of your personal finance / financial independence / retire early journey is important. We never know when unexpected events will come our way - having a cash cushion of 3-6+ months worth of living expenses allows you to avoid going into debt to pay for any unexpected emergencies (car repairs, job loss, death in the family, etc.).
Do you have your emergency fund set up and funded? If not, are you working towards it? Comment below!
Just in case you missed any other parts of this FI/RE series:
Part I: What is Financial Independence and why should I care?
Recommended reading:
The Simple Path to Wealth
Mr. Money Mustache
The Mad Fientist
Personal Finance subreddit
Financial Independence / Retire Early subreddit
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