Categories
Budget

Everything you need to know about an Emergency Fund

Today we want to chat about your emergency fund! First thing’s first, an emergency fund is a separate savings account for emergencies. We advise clients when they are first beginning on their journey to start with $1,000 in the Emergency Fund. It’s not your savings for your vacation, it’s not your investments, it’s set aside specifically to plan for the things you can’t plan for: emergencies!

One of the reasons emergency funds are so important is because when an emergency happens, you are already stressed. We do not want you adding to that stress by having to come up with money for a plane ticket or ER visit.

In fact, when one of my children had to go to the ER FOUR times in 2020, you better believe not having to worry about how to afford them was SO very appreciated.

Likewise, when you’re planning to go to a funeral there’s enough emotion going on there. You don’t want to have to add money stress, anxiety or shame to the mix.

Emergency funds are particularly important when you’re trying to get your finances in order because emergencies and the unexpected can derail your progress quickly. It’s called Murphy’s Law, right? If it can go wrong, it will? So, we are planning for that so we can then put all of our money and energy to getting out of debt and building wealth.

Sometimes people have more saved up and they might be uncomfortable dropping all but $1,000 on debt. We get that, but this process is supposed to be uncomfortable. We say to trust the process millions of people have done. You’ll be okay! Plus, if what you were already doing, your method, was working, you wouldn’t be reading this right now, right? Tough love, but just trust the process. 😉

Here are the basic bullet points on how to set up your Emergency Fund:

  • Use a seperate account from every other account you have.
  • You might even consider using a different bank for this account based on your current relationship with money and money habits. How much do you trust yourself?
  • Nickname your account something awesome. Maybe, “My Name Is NO!” like one of our clients did. It’s something that will help you remember what’s it’s really for.
  • You can also hide the account if you so desire. Most banks have this feature and it helps your money to be out of sight, out of mind. This means less temptation!

Now, how do you know when to use your Emergency Fund? Well, first of all, let’s understand it’s not for borrowing, it’s not an ATM. Nope, there are three questions Dave RAmsey teaches you want to answer before you allow yourself to pull money out of your Emergency Fund:

  • Is it urgent?
  • Is it unexpected?
  • Is it necessary?

Let’s take a look at one example we’ve had come through for the Emergency Fund to full explain this concept. One time while my husband was deployed my dishwasher went kaput! I had three kids which meant a lot of dishes. So, should I have used my Emergency Fund to replace it?

  • Is it urgent? YES! I have three kids. I have a lot of dishes. They’re piling up!
  • Is it unexpected? Um, yes! I had no idea it was on the fritz or even that dishwashers could break. 😉
  • Is it necessary? Oh, here’s the really rude part. Technically it’s not necessary. Technically me & the kids can do dishes by hand. Technically, YES, it could wait until the next budget period and we could pay for it in cash!

So, there you have it. That’s everything you need to know about the Emergency Fund!

Hey, if you need help with this, you’re in luck. We have a super fun coloring page that you can print out and use to help you as you make progress saving up your starter emergency fund! It’s not fancy, it’s not complicated but it is FUN and it will keep you motivated. Download it now!

Categories
Budget

There’s no such thing as an extra paycheck

Do you ever get excited at the prospect of a 3 paycheck month? Or do you think your bonus is “extra” money?

Well, tough love friend, but we’re here to tell you why that’s not true
Check out our latest mini-coaching video on our YouTube channel where we explain how when you’re focused on your goals & your best future, there’s no no such thing as an extra paycheck!

If you can’t watch the video, here are the key points:

There is no such thing as an extra paycheck

  • Very often we think that third paycheck at the end of a month is awesome and extra. In fact, it’s typically going to have the job of paying your bills that are due in the first two weeks of the next month. For example, January the 29th 2021 may be an “extra” paycheck for some. The problem is the next paycheck doesn’t come until February 12th. Most of us have bills with due dates in the first 11 days of the month, right? Right. So, your January 29th paycheck is actually kind of like your Feb. 1st paycheck.
  • Let’s say you didn’t have any bills or you paid all the bills with the first two paychecks. You’ll still find that a good portion of that paycheck needs to fund your food, gas and spending money for the two weeks. You see, time doesn’t stand still just because there is an “extra” paycheck. Nope, you still require food and other things even then!
  • The real problem here is your thinking. You’re thinking paycheck to paycheck. You’re thinking small (as in not big goal minded). You’re thinking reactionary instead of proactively.
  • What you need to do is budget EVERY DOLLAR you earn, EVERY single month. Purposefully.
  • Your budgets need to reflect your highest priorities. For many that’s saving money, paying off debt, investing or funding things like travel & charity. Every “extra” dollar goes to those goals every single time. That means there isn’t really any “extra” dollars. Nope, every dollar has a regular ol’ j-o-b.

If you’re interested in working with us to stop stressing, stop living paycheck to paycheck fill out the contact form here and we’ll be in touch.


Ideal Balance is The Life Coaching Facility in Navarre focused on Fitness, Family & Finance. We know people are stressed about money, they’re unorganized, they’re unhappy with their bodies, they’re distracted and they’re not thriving. But we believe humans are built to be strong & energetic and that good things come to those who work hard and are disciplined. So we coach people to get healthy, to get organized, & to get debt free. The vision is people having a happy & healthy life they’re proud of. We don’t take excuses but we do get results!

Categories
Budget Money

$40K in 10 Weeks!

We wrapped up our ten week Financial Peace University class this Tuesday! It was sure great. =D We had three couples and three single ladies and we just LOVED all of them!!!!

Between the 9 of them, they paid off $40049 in TEN weeks. They cut up !!!21!!! credit cards y’all!!! We have one couple who moved to Baby Step 3 during the class, we have another couple who will be on to Baby Step 3 in December and another by April!!!! We love what we do! =D

As a reminder, here are the Baby Steps:

  • BABY STEP 1
    Save $1,000 for your starter emergency fund.
  • BABY STEP 2
    Pay off all debt (except the house) using the debt snowball.
  • BABY STEP 3
    Save 3–6 months of expenses in a fully funded emergency fund.
  • BABY STEP 4
    Invest 15% of your household income in retirement.
  • BABY STEP 5
    Save for your children’s college fund.
  • BABY STEP 6
    Pay off your home early.
  • BABY STEP 7
    Build wealth and give generously.

We are Ramsey Solutions Master Financial Coaches and we LOVE teaching Financial Peace University, though we only do it once a year during the fall. There are other ways to get our help if it’s something that’s been on your heart.

Financial Coaching / 2 meetings per month / $150 Learn More

Budget Like A Rockstar Workshop June 12 @ 8am. Tickets



Ideal Balance is The Life Coaching Facility in Navarre, Florida that focuses on Fitness, Family & Finance. We help our clients create the discipline & habits they need to strip off what’s holding them back from living the life God created them to live. We work with clients in 1-on-1 sessions in person and virtually as well as in Small Groups in Personal Training sessions, workshops and other events. We’re on a mission to inject hope and empower our community one client at a time. Contact us if you’d like to find out more.