Build an Emergency Fund before you invest in Crypto

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Build an Emergency Fund before you invest in Crypto

Financial basics because it might be useful..
Especially as we are all experiencing financial impacts of these ever changing times.

Crazy shit can happen at any time. A pandemic, job losses, entire industry sectors halted, an emergency surgery, a major car malfunction, emergency travel, the list of things that we will experience sooner or later in life that affect our wellbeing and our finances is somewhat large.

How can you best prepare and ensure that these risks are easy to manage and what can you do to trust in yourself that you can tackle them with ease should they arrive.

As well as ensuring you're not forced to sell your hard earned and hard brought Crypto Assets.
Protect your self from having to sell your Crypto by building Emergency Fund.

The ever sexy, emergency fund. This is money equal to your monthly expenses over time that is protection against sudden events and costs. It’s step one from moving away from living paycheck to paycheck.

It’s like your savings that you really don’t touch unless there's an emergency!

Like a pandemic.. or job loss.

Thankfully it's really easy to start and grow into it.
Let’s set 3 goals.

Building an emergency fund of 1 month, then 3 months then 6 months of expenses.

What do you spend in a week? What do you spend in a month? A one month E Fund is equal to one month of your expenses.

Rent, food, car and phone payments, utilities, heck even your Netflix. Anything you spend in a regular month.

Let's say it's $1000, over a month you spend $1000. So if you lost your job, having $1000 in the bank would last you 1 month.

Create an account separate to your savings account, be sure to get a high interest savings account as close to 2% or higher if you can. Heck even open it at another bank where you don’t have a card to access it. Remember this is for emergencies only! If you don’t touch this for a year or more then that's awesome!

How do you build that first month or $1000?

Putting if you can save $100 into your emergency fund per week you’ll be there in 10 weeks.

Too much right now? Start at $50 a week, at that pace you’ll be there in 20 weeks.
Got a bit more money atm? $200 a week and you’ll be at $1k in 5 weeks and $5k in 25 weeks.

The important thing is to get the ball rolling, $40 week 1, $50 week 2, $60 week 3, consistent incremental growth will help a lot towards your goals.

What does a safety net and Security mean to you?

How would stressing less about weekly money matters feel?

**If you weren’t worrying about your financial Security how would that look?**

What would it feel like to know that no matter what happens to you, you’ve got a back up plan, or a 1, 3 or 6 month buffer that you can live on till things are sorted.

Now it’s important to note you don’t have to sacrifice anything to get to this security, you can slowly and incrementally grow your emergency fund.

However by building it faster you can reap the benefits sooner, how to achieve that? For this future, for this Security, is it worth a small short term sacrifice for you to receive longer term gain?

Reducing your expenses now for the short term and redirecting that money to your emergency fund can grow it even faster to get you to that level sooner.

Spending $100 on dining out, uber eats and takeaway a week or 2? Spending $100 plus on partying every couple weeks?

Do you really need a $5 coffee every other day?

One month is no time at all, we can do anything for a month.

Why not build your first emergency fund in that month? $250 a week and you’ll have it within the month!!

The feeling you’ll have from the security of one month expenses in your emergency fund will be like a breath of fresh air. Hopefully relax your stress about money and give you comfort that no matter what happens you have a buffer.

Take that feeling and let it be a driving force behind your growth to 3 months of expenses in your emergency fund and maybe even 6 months. $5k as a backup for emergencies and a security feels even better than $1K.

What happens then?

Your safety net is there when you need it.

Global pandemic happens? You’ve got 3-6 months of expenses covered to give you the space and time to work for a solution. And you won't have to sell your crypto.

Lose your job? You’ve got 3-6 months of expenses paid for to give you time to find another. And you won't have to sell your crypto to make ends met.

Your emergency fund accounts are not your savings, make another account for that.
Your saving’s account is where you save your money for a new car or for a holiday or the large cost you know is coming up.

!!!***Do not use your emergency fund unless you really have too.***!!!
That money stays there for when you truly need it when you can’t find your way around a problem, job loss or other. Take from it as little as you need.
It’s purpose is to be a security blanket so you know that you are safe.
Now you can trust yourself that you can take things to the next level.

Hustle, work hard, seek adventure and knowledge, build up your assets, build your savings, invest, enjoy life.
Hope this was a useful start ito financial literacy, a area I'm passionate about and think is crucial.

I've seen too many friends sell their last $200 in crypto just weeks/months before it 10+xed because they had to pay rent.
Protect your crypto with an emergency fund.

submitted by /u/KyleCrypto
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