If your job shutdown today how long could you survive?
Now that federal workers are going to miss out on their first paycheck due to the shutdown I thought it would be a good time to bring up an important personal finance topic. I am going to talk about this sensitive topic as artfully as possible, my intent is to help people see how to take ownership of their own finances and not be beholden to an employer. This may hurt some people’s feelings but it’s the truth and if you follow my advice you will be better off for it, just know it’s not my intent to put anyone down, only to build them up.
It seems to be the way of the middle class to live paycheck to paycheck, and that is sad.
I was watching CNN and they are making a huge deal about federal workers who wont be able to pay their bills and that is an injustice for them to not be paid for working, but I gotta say that it’s also very irresponsible to not have savings to pay your bills after missing only 1 paycheck! That’s crazy to me. Look, I am an avid supporter of the middle class and workers and acknowledge wages have been stagnate since the 80’s while the cost of living keeps rising. This put a lot of people in tough situations. I know many people are living paycheck to paycheck due to these circumstances. BUT! This is no excuse for not building a savings reserve. I don’t care how much you make, you must save some portion of your money to build a savings reserve. Why is a savings reserve so important?
I want regular people to live more comfortably and I know how uncomfortable it is to be totally dependent on a job for you and your family’s livelihood. It’s extremely stressful and makes you feel powerless. This super dependence on a job means you have to do exactly as your employer says or risk losing everything, what if they won’t let you take off to attend a special event for your kids or take care of a sick family member, or any other critically important thing in your life?
If you cant pay your bills after missing one paycheck you are making yourself into the 21st century version of peasant from medieval times.
The beauty of living in a free country is that we are supposed to be free, we aren’t supposed to be peasants beholden to lords like medieval times, but if you don’t manage your finances properly that is basically what you will become. The sad part is most people do this to themselves when they buy a brand new car with a high payment, or rent/buy a house that takes up too much of their income. I want people to have the security of knowing if there is a government shutdown or they get fired or an emergency happens they won’t lose everything.
The first step to avoid becoming a peasant is to save at least 6 months of living expenses.
I know it’s hard but anyone can save 6 months reserves if they have discipline and focus. The best way to do this is to make a savings account at a different bank than the one you use everyday and auto transfer a percentage of your money on payday to this account. Even if you can only save $10, do it! Over time, your savings and your confidence will grow. You will feel more empowered because no matter what happens in life you know you have some savings to handle getting fired or dealing with an emergency.
I hope the government shutdown and this post help everyone realize how important it is to save money. The chips are stacked against us but we still have to do everything we can do live better lives and I strongly believe if more people saved reserves they would live happier, more care free lives rather than the stressful anxious ones many of us live today. If this hit you in the feels, it’s probably because you know I’m right, the question is what are you going to do about it?