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Mending Your #SafetyNet

Edwin Harris - Mending The Nets
Edwin Harris – Mending The Nets (Photo credit: Wikipedia)At the end of the season, it’s a good time to mend your nets.

Updated Jan 2019.
Originally posted 2013.
Given today’s lengthy, record-setting US government shutdown and the hashtag #shutdownstories, this post needed an update. As a friend told me when we hit 40; “Exercise is no longer a luxury.” A safety net and emergency funds are no longer a luxury. This shutdown illustrates with stories the numbers about Americans living paycheck to paycheck.



When we reach the financial adult stage (your chronological age may vary); you may wish to mend or create a safety net. Safety nets are different from person to person; so feel free to select the pieces that match your own situation. 

Security Risk management: often solved with insurance products. Car, renters, condo, house, flood, fire and theft, cell phone, jewelry, business continuation etc. Even if you think you don’t have expensive things, you probably do. How much were your electronic gizmos? Can you afford being without [insert category here]? Many rental complexes now require renters to have insurance, which will also shield you from many liabilities (kitchen or electrical fire, water heater or tub overflow, leaky toilet, disposal failure, to name a few.) Check your specific policies for new exclusions based on the sharing economy, such as AirBNB or or using your car for ridesharing.

Savings (also known as cash these days due to barely visible interest). Rates are rising and one can earn more than whisper of interest One person’s emergency fund is $500, another’s is $10,000 and I have met someone whose security needs are met by one year’s income in the bank ($65,000). I like to suggest thinking of this fund in terms of months of income or expenses (whichever is greater). There’s a joke in there, sort of. What should be the minimum? My audiences are well informed and I hear 3-6 months from many when I ask this question. I suggest making the fund real by linking it to your insurance deductibles, the cost of 4 new tires, or even your family OOP, out of pocket limit for annual health care costs.

Residence  Home is where the heart is (and the bills) and your fridge. (see my earlier post called Clean One Refrigerator Shelf at a Time here)

Friends and Family Shoulders to cry on or celebrate with. Who can help you stay accountable to yourself? Who will understand and support your goals? Which of your friends or other loved ones can give you an assist with tangible or intangible help? Do you need to move into someone’s spare bedroom for three months while you save up for XYZ goal? (Tip: set a deadline for being in-residence-the relationship is something you don’t want to lose).

The Future What does your future hold? What’s on your bucket list?

Tools
Education, knowledge or wisdom (not to be confused with advertising, too many data points, endless supply of new products, Squirrel!),
Wisdom comes from mistakes, mistakes come from experience.  Or,

There is only one thing more painful than learning from experience, and that is not learning from experience.  ~Laurence J. Peter

Emotional IQ  Know yourself. Are you a DIY (do it yourself) person? How resilient are you? Can you reframe an experience and move forward? Do you want to bury the memories? What makes you feel shame (if anything) ? What are your money values ? Status or security, self fulfillment or self indulgence? Are you a planner, spontaneous spender, or celebrator?

How do you like to learn new information? Are you a lifelong learner? I have always enjoyed the opportunities I have had in my career to ask other people about their questions, or to consider what the important questions are for me when making a decision. Getting help with the right questions can be better than only searching for the answers.

Before You Quit Your Job-Five Factors to Consider

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Filed under Be Prepared, Family Lessons About Money, Financial Wellness