To Spend, You Must Save
Emergencies are something you cannot predict and but you can always be prepared to some extent. You need at least three months of savings in case of emergencies. But why are we talking emergencies when we should be dealing with bankruptcy? Because contrary to popular belief, it is not only spendaholics who run the risk of going bankrupt. If you belong to a regular American family, chances are your earnings just suffice to pay for your monthly expenditure and your savings are almost negligible. So in the event of an unexpected emergency, you could be one of the first people who will fall down the debt precipice and could soon be facing bankruptcy.
Unfortunately, tragedies will continue to be a part of our lives and we honestly cannot expect life to be one long stretch of sunny weather. Although nothing can replace the pain and sorrow felt due to a casualty, by taking advantage of pre-catastrophe planning efforts like, savings accounts and post-catastrophe benefits, like tax deductions, you may be able to recover some of your financial losses.
You’ve heard this many times before but if it hasn’t struck you as an important piece of advice, let me strike it in again — SAVE, SAVE, SAVE. I know it isn’t easy to save when you don’t have enough to pay off your numerous loans. But don’t make that an excuse. Let’s be real, even those bringing in 6 figures or more find themselves also living without any type of savings. Have you ever wondered why? Mainly because we don’t take stock of our daily expenses. This will help you know if there are any unnecessary expenses. Cull them out and reallocate the money to other, important avenues. Once you begin doing this, you’ll see how the money accumulates. Still not satisfied? Well, I’ll get into the nitty-gritties of saving in my next piece. Until then, think about how you can protect yourself.