Thursday, October 16, 2008

Refocus to SAVINGS

I read an article the other day in the Kiplinger Magazine that Boston Gal posted about. It really scared me. A middle-aged couple, with no credit card debt, their house nearly paid off, and making a good living seemed like their finances were in great shape...until the husband lost his job. What were they missing? A substantial savings account (besides retirement) to get them through. Our situation is similar. (Of course with the exception of us having a HELOC and a mortgage that is no where near being paid off). We are cash poor. We do not have a substantial savings account that will get us through a job loss. So, I figured out how much we would need in an 8-month emergency fund...and it is a whopping $60,000. This doesn't include paying for our kid's college... it is just mortgage, utilities (no cable), food, gas, and medical insurance (a HUGE expense for a family of 6).

So, our new focus will be on building this savings...FAST!

Preparation is the key to financial serenity. When you have financial serenity, you know you will be okay no matter what the financial markets are doing. And peace of mind is worth preparing for!
P.S.Thanks goes to Jennifer at Finding Financial Peace for this idea too!

So, the HELOC debt repayment will be second, and the emergency account will be first.


CT Mom said...

Hi Sharon - I read the same article, and came to the same conclusion - we need a bigger emergency fund! We also have to pay off our home improvements, so I'm doing 50/50 so we can try to do both. Definitely scary times!

Jennifer said...

Thanks Sharon. I totally agree about the importance of peace of mind. I'm off to read that article now!