Emergency Funds: If you stay ready, you don't have to get ready!
At the end of 2018, I was laid off! The start-up that I was working for dissolved (the downside of start-ups). I got the call while I was out of town for my mother’s wedding (horrible timing right?), and for a brief moment I panicked but then I remembered that I was prepared for a moment like this.
These are the 4 things that I had in place:
1. An emergency fund account - after I received my last paycheck I was able to “pay myself” from my own savings account. I transferred over the same dollar amount I would have received from my paycheck on a bi-weekly basis. 2. My own company - I’ve been an entrepreneur for the last 8 years (while still working full-time) and last year my business consulting company Westbrooks Consulting Group really took off. I booked a 5-figure corporate project that kept me afloat once I was laid off. 3. Investment accounts - I was able to sell some of my investments (ETF’s) and transfer the funds into my bank account. This gave me the cushion I needed when I had to wait for my client to pay me (corporate clients don’t pay on time). 4. Reduced my expenses - I stopped going out as much and reduced my expenses. I said no to attending some brunches, dinners and trips. I also didn’t fly home for the holidays.
Knock your finances out of the park!
Being prepared gives you options...like the ability to look for a new job in peace and not out of desperation. The ability to help family out during a time of need and it also reduces the stress that comes when the income stops.