海角大神

How to build a financial safety net

If life is something like a high wire act, everyone needs a financial safety net. Hamm offers his advice for developing a financial safety net for if you fall on hard times.

I tend to view life as being something like a high wire act at the circus.

We balance ourselves on that high wire and attempt to walk through life. We鈥檙e carrying a lot of weight to make the balancing act even trickier 鈥� children, marriage, and other responsibilities.

Eventually, something happens and we fall. Something interfered with our walk 鈥� a personal failing, a job loss, or something else entirely.

When we fall, there鈥檚 a safety net there to catch us. Some of us have family wealth or personally accumulated wealth. Others are surrounded by family and close friends for support. Still others have built up a long history of professional contacts. Skills and personal attributes also make up a part of that safety net.聽

Not everyone can draw upon all of those threads to weave their safety net, though. For some of us, the threads are much stronger. For others, they鈥檙e weaker, and for still others, there鈥檚 nothing there at all.

So, what does all that mean?

Some people can afford acrobatics on the high wire, while others cannot.聽The person who isn鈥檛 burdened by responsibilities and has an extremely strong net to fall onto can manage things in life that the person who is carrying a great deal of responsibility with a weak safety net cannot.

A single, healthy child of a supportive and wealthy family can easily dive into career paths and education without any sort of short-term return without having to worry too much about it.

On the other hand, I know of at least one older sibling who is barely twenty and is caring for her two younger siblings. There is no money for them and no functional family. That person has a great deal of burden and no safety net. That person cannot afford to take many risks at all on the high wire, so that person is consigned to getting the best possible paying job聽now聽and living with whatever it is.

It is completely unreasonable to think that the same financial and career plans would apply to these two people.聽They simply live in different worlds. Even things that they could both utilize, like being very frugal with their money, applies much more strongly to one than the other.

Whenever you read about personal finance tactics and you recognize that some of them don鈥檛 apply to you, remember that they do apply to people carrying different burdens and to people with a stronger 鈥� or weaker 鈥� safety net than you have.

This all leads to a pretty straightforward question:聽what can a person do to improve their safety net?聽There are several steps anyone can take.

贵颈谤蝉迟,听build up an emergency fund.聽Try to get to at least $1,000 in cash in a savings account and just let it sit there. When an emergency happens in your life, you have the cash to deal with it.

Beyond that, focus on paying off debts and not acquiring new ones. If you don鈥檛 have a safety net, minimizing your bills and maximizing the amount of money you can save each month is your best path.

厂别肠辞苍诲,听build a strong social circle and聽be there聽for the people in it.聽The best thing you can do is identify people that seem reliable and, when they need a hand in their life, step up and give them a hand without expecting anything in return. Do that enough to other reliable people and you begin to build a relationship with them, one that will be there for you when you stumble and fall.

When a person loses a job, help them find another one. When a person is moving, help them to move. When a person needs help with something, just step up and help, even if they don鈥檛 ask for it. There is no better way to build a lasting and valuable relationship with someone than actually helping them when they need it.

罢丑颈谤诲,听take your work seriously, even when it seems trivial.聽Yes, sweeping the floor is a very simple task and it鈥檚 boring, but do it with focus and strive to do it well. If you have a task to do, don鈥檛 just do the minimum to get it 鈥渄one.鈥� Try to get it done as well as you can within the alloted time (or within reasonable time). If you鈥檙e standing around with nothing to do, look for something to do.

Sure, some of the stuff you do will be overlooked, but it won鈥檛 be long before you begin to establish a pattern of excellence and the people who rely on you in the workplace will notice. When your chips are down, that pattern of excellence will be the thing that sets you apart and gives you the help you need.

贵颈苍补濒濒测,听stop wasting time and energy on things you can鈥檛 control.聽Sure, someone else might have a wealthy and supportive family while you do not. Don鈥檛 waste a second being jealous of them or wishing you were in their shoes. Instead, focus on what you聽can聽control, including the things above.

We鈥檙e all walking the tightrope, but the journey is a little different for each of us.

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