Today’s post is a combination guest post from Good Nelly, who has written previous guest posts on my site with my commentary. Good Nelly always picks timely topics and I appreciate that.
My commentary is laced throughout the article in blue so you can see a few angles on the important topic of building an emergency fund in difficult times.
You may be feeling the negative effect of the coronavirus pandemic and wondering how you can possibly build an Emergency fund as described in Dave Ramsey’s Baby Step 1.
A personal financial crisis is unpredictable, and often you cannot know when it will strike. Unfortunately, with the coronavirus pandemic, there are a lot of people who have been negatively affected at the same time.
Typically, when a lot of folks experience financial hardship simultaneously it often results in a recession. A recession is defined as a temporary economic decline for two successive quarters. While we are not quite there yet, we definitely seem to be heading there. Professionals have been predicting that this downturn will be deep but perhaps short. Fingers crossed it is short.
Firstly, you may want to check out the COVID-19 resource guide before delving into this article further. This guide can answer questions about what you can do if you are out of work or if you’re looking for work.
The purpose of this article is to provide a few options on how you can build an emergency fund. It’s always advisable to have some savings even if it means you have less to spend. When you’re budgeting, you should always plan for the unseen expenses that can arise. For instance, you could lose your job, your car breaks down, or a friend you are renting a property with leaves abruptly.
The above are some examples of financial burdens, and they can vary in size and severity. The best solution is having an emergency fund because it will ensure that you’re covered in some capacity.