What would happen to you and your family if:
- your fridge broke down?
- your car transmission went out?
- the primary breadwinner in your family dies?
- the primary breadwinner in your family becomes disabled?
- the Social Security fund goes bankrupt and you will no longer receive a Social Security check?
As many as 76% of Americans live paycheck-to-paycheck – they have little to no savings and they spend more than they earn each month. These people are the Financially Fragile.
When one of the above events happens it can be challenging for anyone, but it is devastating for the Financially Fragile.
If you are living this way, you can take a few steps to become Financially Resilient. Being Financially Resilient means that you are able to withstand or recover quickly from difficult financial conditions, such as your car transmission going out. Again, that can be difficult for anyone, but the Financially Resilient will recover quickly while it can destroy the Financially Fragile.
Here are some things I recommend to start down the path to becoming Financially Resilient:
- Have an emergency fund – start out with $1,000
- Use a budget[i]
- Spend less than you earn
- Have adequate insurance
- Pay off debt
- Use a Revolving Savings account[ii]
- Have some “fun money” or “mad money”
- Pay attention to your credit score[iii]
For more information on these topics, see the links below. I encourage you to take steps to become more Financially Resilient.
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