D-1. How to accumulate a $10K starter emergency fund
Thus far, we have not mentioned how to save $10K. There are two primary approaches: 1) Increase your income including establishing multiple streams of income and/or 2) Decrease wasteful spending.
D-2. Ways to increase your income including establishing multiple streams of income:
a. Work overtime at your existing position,
b. Earn a promotion at your current employer, but avoid spending the extra money (aka lifestyle creep),
c. Switch to another company with higher pay,
d. Tutor in an area where you are a subject matter expert,
e. Sell things that you no longer need,
f. Perform legitimate online services,
g. Make arts and crafts to sell,
h. Get a second job. When it comes to earning extra money, we, at Overton Leadership Associates, offer a free, 1-page list of more than 50 ways to earn money without going to college. Contact us at 205-667-3592 and we will text it to you. If you sacrificed and hustled (worked extra hours, earned a promotion at work, bypassed entertainment events, earned money in a sideline business, etc.), then it is your money and you are not obligated to give it to anyone or to mention it to anyone. We believe that all young adults need multiple, independent streams of income as a hedge against the continued increase in the cost of living. Furthermore, it appears that everyone, regardless of age, needs multiple streams of income.
D-3. For ways to decrease wasteful spending, please go to the Overton Leadership Associates blog titled, ‘Examples of Wasteful Spending.’
D-4. When should I commit to saving the $10K starter emergency fund?
The problem most people have regarding saving money is the reluctance to take action. Talk is cheap, so when are you going to quit hoping that things magically happen and instead take control and execute concrete actions? Ready to get control of your money? Ready to hustle for the next several years? Committed to staying the course for the long run? When you have made the decision to take control of your money, then withdraw $100 from your account and go have fun spending it. Consider that to be the last frivolous spending that you will do for awhile because it is time to get serious and mentally prepared to go on a quest to get control of your money.
D-5. In closing, we want to reiterate our Disclosure
While we hope that this discussion results in young adults having a deeper understanding of money, we are not financial advisors. We are not certified in any financial industry and only provide this information as a starting point for an individual to develop a plan for getting control of his/her financial situation. Everything presented is our opinion. No one is required to take any of the actions detailed in this document. There are no guarantees that anything written here will materialize exactly as described. We believe that it is essential for young adults to demystify money. That’s why this discussion was intentionally filled with redundant information so understand that hearing the message multiple times was done in hopes that young adults would think well beyond their age and start proactively preparing for future financial situations. We know that we have provided a lot of information here, but do not miss the fundamental message: Save $100 ten times and then you will have $1000. Repeat the same process by saving $1000 ten times. Now $1000 x 10 equals $10,000. Consider the $10K to be a Starter Emergency Fund. That is a good start toward building a more robust emergency fund and eventually a family financial portfolio.
Herb