SPENDING FUTURE INCOME 4

If your household’s lifestyle pushes you to keep spending income several months into the future (i.e., live beyond your means and rely heavily on credit cards) and are unable to save at least 5% of your monthly income, you are in DANGER.

You are living on the edge of a financial disaster. If any kind of emergency hits, you will need cash in a hurry; i.e., sudden sickness in the household (not covered by insurance or company benefit), a disaster such as a fire (even a small one which will need some repairs), a fire at your neighbor’s house which affects your own house, an accident involving your family or properties, etc . . .

You have to keep reminding yourself that savings are not only for the future and rainy days, but also for emergencies.

image from Microsoft Clipart