Can your family handle a sudden income loss?
Stories of financial burden and tough decisions happen every day.
Thousands of families have to decide if they are putting food on the table or making their debt payments.
The panic and stress over lack of income is a symptom of a bigger problem.
It isn't a political problem.
We can't blame Congress.
It isn't President Trump's fault.
It's a personal finance problem.
We can blame consumerism and ultimately…
It's our fault.
The Hard Truth
65% of Americans have less than $1,000 in emergency savings and only 4% have enough to sustain living expenses for up to six weeks. (1)
That is the sad reality in which we live.
This is not the government's fault.
This is the consumer's fault.
We have bought the lie that spending our paycheck is nobler than saving it. That having things is better than having safety. Wait, we should have safety……what is safety?
Don't misunderstand me. I'm not talking about the wealthy. It makes no difference if you make $300,000 or $30,000 a year. If you're not consistently saving a portion of your income each pay period you are overspending.
When we forgo building an Emergency Savings and a 30 to 90-day savings we are only hurting ourselves and our family.
Here's a reality check for you – your income is not guaranteed. Never was, never will be.
In the early 1980s my mom was a GTE phone operator (back when you pressed “0” for a live person to connect your long-distance call). It was a well paying, secure job. That was until 1986 when Operators became a thing of the past. Her well paying, retire-from-here-some-day job was suddenly gone.
My brother-in-law worked for a paper plant for 17 years and one day he and many other workers were laid off. Thanks for your service, here's the door…..
We can all share stories of people we know or even of our own that echo this same type of situation.
Yet most of us go on living life, spending money, and never giving a thought to the idea that saving money is not a “some day dream” but a right now reality.
You cannot go on living paycheck to paycheck and then panic when there's a sudden loss of income (nor can you blame your employer, the guy who took your job from you, the Congress, or the President). I mean, you can but why would you? Why not make a counter-cultural choice to start saving and stop living a consumer-driven life? Why not position yourself to weather these storms of life instead of being a victim of them?
Separating Politics from Reality
As a budget coach, I have heard income-crisis stories often: no money to pay the bills, living in hotels, defaulted mortgages, and multiple shut-off notices.
So why are you hearing so much about this now when it is nothing new?
The truth is, this stuff happens every day because of layoffs, downsizing, job loss, marital separation & divorce, illness, injury, and emergency.
When the factory down the road closes and 300 people lose their jobs it may make national news but for what – a 25-second clip? It isn't replayed over and over again.
I want you to sit up and take notice of the problem but first, you need to understand what the problem really is.
It makes me mad that the sad state of the American family budget is being used as a talking point for political ideology.
A Wake Up Call For You
Any time you hear a story that someone has lost their income it should be a wake-up call or at the very least, a reminder to you.
Are you taking steps to be financially secure enough to survive without a paycheck?
That doesn't mean having investment properties or a diversified portfolio (but it can). For most of us, it means taking small steps every day to spend less than we make and save slowly over time.
It means starting today on your $1,000 emergency savings. No, that won't pay all your bills but it will put food on the table or pay the electricity for the month, maybe both.
It means spending less than you're earning by taking a truthful look at where your money is going.
It may mean prioritizing and downsizing in various areas of your life so that you can start saving and paying off debts.
The talking point that our government (either side) is at fault for people not being able to pay their bills or buy groceries is simply false. Each one of us is responsible for how we steward the money we are given. We choose the mortgage payments. We chose consumer debt. We choose not to make savings a priority.
Can your family handle a sudden income loss?
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