Raise an Emergency Fund
Save $1,000 to reduce risk immediately. Once you eliminate debt bump it up to 3-6 months of living expenses. After you have figured out a budget the next step toward gaining financial freedom is to raise an emergency fund to help reduce your risk. An emergency fund will help reduce the turbulence in your financial state immediately.
The goal of an emergency fund is to eventually have 3-6 months of living expenses saved up in a regular savings account for when emergencies arrive, and they will come knocking. 3-6 months of living expenses in a savings account is the goal for an emergency fund, but first you should do whatever you can to get $1,000 saved up in your beginner emergency fund.
Save $1,000 today!
Setting aside $1,000 today will help to guard your finances against some emergencies without giving you too much security while you work on getting out of debt with intensity and focus. Experiencing financial freedom requires us to get out of debt and the best way to get out of debt is to attack it with great intensity and get rid of it as quickly as possible. When we have much more than $1,000 saved up we lose our intensity because of our new found sense of security. If you know that you have emergencies pending then start saving for them. For instance if you know the refrigerator is about to quit working then start saving and searching for a good used one to help get you by. You may also need a slightly larger emergency fund, but don’t get too comfortable, instead think how much do I need to keep from using credit.
Getting out of debt will be your next focus and once you get your debt paid off your next goal is to build up your full emergency fund of 3-6 months of living expenses. This will help ensure that you are able to stay out of debt under normal circumstances and it will also provide you with a cushion to live on should you lose your job or become unable to work for a period of time due to an injury.
Your emergency fund is for emergencies ONLY and because it needs to be readily available it should be in a regular savings account or a money market account. The purpose of an emergency fund is to be available for emergencies so if you try to get fancy with it by investing it you will not have funds available to you when you do need them. Do not worry though, once you eliminate debt your debt, excluding your house you will have money available to start investing, but let’s get through the first few steps first. The path to financial freedom requires focus and intensity, especially in the beginning.
Once you have your beginner emergency fund taken care of the next step is to “Eliminate Debt.” Being completely debt free is the goal of this step, but depending on whether you have a mortgage or not you may choose not to wait to start investing until your house is paid off, but a paid for house with zero debt will allow you the most access possible to your income so that you can “Earn Interest” by investing and “Develop Increased Generosity” in life.
Earning interest with your money will come as you work through each step with focused energy. Each of us are able to multitask on some level, but despite the ability to multitask we are actually see better results when we are singularly focused and put all of our energy to accomplishing one task at a time. In order to get $1,000 set aside you need to get serious and start selling stuff, adhere to a strict budget, and even take on a part time job if you can. These things will continue to be beneficial even after you get you beginner emergency fund saved and start knocking out your debt.
Experiencing FREEDOM with your finances will not just happen, it requires a conscious effort on your part and it requires intensity. If you do not approach this goal with intensity the process will become prolonged and you will start to lose energy and you will end up living more of your life without the freedom that God has intended for us to live. Engaging in the process of experiencing financial freedom will almost certainly cause others to look at you like you have two heads and you will even experience people who will try to discourage you and get you off of track, but if you create a plan and stick to it you will see changes.
You CAN change your financial situation today and experience FREEDOM, but you have to make the decision in your mind, in your heart, and in your spirit. When you are ready to do what you need to do to experience financial freedom then start by doing the steps one at a time. Surround yourself with people who will encourage you and support you in your endeavor and learn as much as you can. If you would like some help during the process please contact me and I would be glad to help you no matter where you live or where you are in the process. You can call 573-208-4266. You do not have to do this alone! Even if you are just looking for some encouragement please call me or email me, I am here for you!
Good luck in your journey toward financial freedom!