I recently read the following statistic in the Wall Street Journal, 70% of Americans are living paycheck to paycheck. This number caused me to wonder…what if?
What if …you incurred an unexpected expense of $1000 or more? Could you cash flow it or would you resort to plastic potential?
What if… a friend of family member needed a fast cash infusion? Could you chip in?
What if…you lost your job tomorrow? Would the income loss cause an immediate financial hardship?
We encourage you to create a Mad Money fund of at least $1000. Store that in a liquid, online account so that you can respond to minor emergencies while working a debt repayment plan. Once your consumer debt levels equal 0, then work towards a full emergency fund of 3 – 6 months of expenses.