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Hi Reader,

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While driving to work, all I could think about was my emergency fund or rather, the lack of one. The thought had been nagging at me ever since my car battery died unexpectedly that month.

I’d paid for the replacement with a credit card, but the stress of not having cash on hand lingered. What if something bigger happened?

As a laboratory technologist, I was used to solving problems. But this one felt personal. I had always meant to save for emergencies, but between car payment, mortgage, and life’s many little vices, the fund never grew past a few hundred dollars. As I pulled into the parking lot, I resolved to make a change.

I thought of that past life lesson when I read Bankrate’s 2024 Annual Emergency Savings Report. The data hit close to home.

59% of U.S. adults feel uncomfortable with their emergency savings. Even more striking, the discomfort cut across all generations; Gen Z, Millennials, Gen X, and even Baby Boomers.

Why an Emergency Fund Matters

Unexpected expenses can throw your life off balance. Whether it’s a car repair, medical bill, or sudden job loss, not having savings can lead to stress, anxiety, and financial strain.

A solid emergency fund provides a safety net. This allows you to handle life’s surprises with confidence and calm.

I knew it wouldn’t be easy, but I also knew it was necessary. Here's how I tackled it, and how you can, too.

Step 1: Find Your "Why"

The first step in building an emergency fund is understanding your motivation. I asked myself:

• Why do I want an emergency fund?
• What would it feel like to face a crisis without financial worry?

My “why” was clear. I wanted to stop living paycheck to paycheck. And I wanted to avoid relying on credit cards for emergencies. The thought of financial freedom became my driving force.

Step 2: Track and Prioritize

I started by taking an honest look at my finances. I tracked my spending for two months and discovered areas where I could cut back.

Here’s how you can do the same:

1. Track Your Spending: Write down every expense, from mortgage to coffee runs.
2. Separate Needs from Wants: Essentials like mortgage and groceries come first. Wants, like vacations or eating out can be adjusted.
3. Pay Yourself First: Treat savings as a non-negotiable expense. Set aside a specific amount for your emergency fund each month.

Step 3: Set a Clear Goal

Building an emergency fund can feel overwhelming. But breaking it into smaller, manageable steps makes it achievable. I decided to save $1,000 as my first milestone. Then I work toward covering three months of essential expenses.

Ask yourself:

• What emergencies am I preparing for?
• How much will I need to feel secure?

Write down your goal and commit to it.

Step 4: Automate Your Savings

Life gets busy, and it’s easy to forget saving. That’s where automation comes in. I set up an automatic transfer to my savings account on payday. This ensured my emergency fund grew consistently without relying on my willpower.

For those who prefer handling cash, the envelope system works well. Set aside physical cash each week specifically for emergencies.

Step 5: Stay on Track and Stay Motivated

Building an emergency fund takes time and discipline. To stay motivated:

• Revisit your “why” regularly.
• Celebrate small wins. Every milestone—whether it’s $100 or $1,000—is a step closer to financial security.
• Avoid dipping into the fund unless it’s a true emergency. Create a list of what qualifies as an emergency to stay disciplined.

I treated myself to a small reward. A new pair of work pants when I reached my first $800. Recognizing my progress kept me motivated to keep saving.

Conclusion

By the end of that year, my emergency fund had grown about $2,500. It wasn’t my ultimate goal, but it was a foundation, something I could rely on in tough times. More importantly, it gave me a sense of control over my financial future.

If your emergency fund feels like an impossible dream, start small. Track your spending, find your “why,” and commit to saving consistently. Each step brings you closer to financial peace of mind.

So, what’s stopping you from starting today? Take that first step and build the safety net your future self will thank you for.

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🎓What I Have Learned

The choices you make today can strengthen or weaken your financial foundation - Bobby Clark

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📝Knock out these money-related tasks now to help you finish the month strong -

• Create a cash flow statement of 2024 income minus expenses. Calculate personal net worth.
• Consider Professional Financial Advice
• Save More for Retirement
• Review your W-4 withholdings

You’re entitled to one free credit report per year from each of the three credit reporting agencies: TransUnion, Experian, and Equifax. Reports can be obtained from annualcreditreport.com.

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Money IQ - Your chance to gauge your money knowledge

IQ Question: How much money should you put into savings every month?

A. $1,000

B. 2% of each paycheck

C. 10% of each paycheck

D. All leftover cash at the end of the month
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📢Testimonial

Good morning Bobby, hope all is well with you and the family. I wanted to thank you again for your coaching a few years back. Your coaching helped me develop healthy financial habits. Now 2 promotions later earning excellent income without the bad debt looming over my house, allowing my family to enjoy life without the constant reminder of debt interrupting our lives. Thank you! W.K.J.

🔶Your Financial Reset Starts Here

Think of this as a friendly chat about your money goals – no pressure, just progress. I’m offering a free 30-minute financial coaching assessment to help you get unstuck and move forward.
Here’s what we’ll cover:

• What’s working in your financial life – and what’s not
• Where you want to go financially
• A simple action step to get started
  💬 Ready to invest 30 minutes in yourself? Book your free session now and let’s take the first step together!

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Thanks for reading this far.
Thanks for your time and kindness.
Stay healthy, motivated, and wise.
Celebrate.
😀See you in February!

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