2020 has been a crazy year due to COVID-19, but things will get better. If you look back at previous health and economic crises, things were crazy for a while, but we always got back on our feet. We were able to rebuild and become stronger than we were prior to the crisis. I want to provide hope and advise on how we can start to rebuild.
There are a few things that we can do financially to help us get back on our feet. First, it is important to create a budget. A budget is a game plan to help us meet our financial goals. For example, if you are wanting to buy a house soon, you will probably need to have a down payment. Once we figure out how much of a down payment is needed, you can figure out how much you need to save each month to reach the desired down payment amount. A budget will also give a clearer picture of where our money is going. It helps us track how much money is spent on food, clothes, movies, etc. Once we know where our money is going, we will have a better opportunity to reach our goals.
An emergency fund is crucial for our financial success. An emergency fund helps us cashflow our expenses when an emergency occurs. This could be a job loss, car repair, medical bills, etc. I would recommend building an emergency fund to around 3 – 6 months of expenses. This will help provide a buffer if any crazy happens. If you are in a single income household or have a heavy commission-based income, I would recommend having closer to 6 months of expenses in your emergency fund. If you have a dual income household, a 3-month emergency fund should be sufficient, but you can have more if you would like.
Sometimes, having a mentor or a financial coach can help provide some insight on how to handle the finances more efficiently. If you get a mentor or financial coach, make sure that they know what they are doing. If they are managing their finances well, it’s normally a good sign that they know what they are doing. There is no shame in asking for help for managing your finances. At the end of the day, I want you to be able to achieve your goals, build wealth, and create a legacy.
As we wrap up this article, I want you to think of 3 things you can do this week to take a step forward in managing your finances and achieving your goals. It could be creating or reviewing your budget. It could be creating an emergency fund. It could even be finding a mentor or a financial coach. If you need a financial coach, I would love to work with you. You can schedule a session by going to my website at www.pattonfinancialcoaching.com or by emailing me at patton.financialcoaching@gmail.com.
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