As we jump into this idea of being more prepared for whatever life may throw at us, we need to keep in mind which things are the most likely to occur. Chances are much higher that you suffer some misfortune that sets you back and interferes with your life and plans rather than some random act of violence. So, as we prepare for both, we want to prioritize healthy habits and values that will increase your effectiveness in nearly every situation.
With this step we are talking about building our financial confidence. For many, this is a difficult and foreign practice; it is a complaint of many that American culture has not done well equipping individuals with financial discipline. Thankfully, I was raised with some great teachers and they set the foundation early for this practice. I was raised with a couple reinforced financial principles, one of which was that I should be saving 10% of every allowance, paycheck or gift. Then, as I was getting closer to leaving my parent's home, they really encouraged me to set aside money solely as an emergency fund. One that could allow me to survive without any income for a specific amount of time.
In application, for Step 2, I encourage you to figure out what half of your monthly expenditure will be (outline your budget if you don't have one), and set that amount aside -
So, as an example, if one's expenses per month is $2,500 - This individual should work to put $1,750 away to cover their costs for two weeks without pay. Some people would say that you only need to consider essential bills and expenses, but I disagree. If I am prepping a cushion, it might as well be a comfortable one. And NO credit cards do not count as an emergency fund. We are trying to be responsible here.
Remember lets not place this in a checking or savings account, or somewhere that you will be likely to access on a whim. We want this money to be dedicated for emergencies only. I like cold hard cash put away inconveniently enough that I have to commit to using it. Or if you want to hit two birds with one stone, maybe store some of this money in alternative currency or precious metals - but it needs to be something that would be easily converted back into cash.
WHY
So, you might not think this step is absolutely vital (though many more people now do since 2020), so lets talk about why we want to have a financial cushion arranged. Of course there is the common sense aspects of unexpected leaves from work, medical bills, severe transportation issues, etc. But the aspect that has made the most difference to me since 2020 is that having a nest egg is EMPOWERING. In at least three situations since 2020 I have been able to leverage my flexibility that a capable emergency fund provides for. In two situations, it served its exact purpose and enabled me to handle situations without going in debt. One such occasion was when a family member had unexpected medical complications and had to be in the hospital for over two months, and I had to be available to be involved and present. I was able to cut the debt incurred by the experience (which was considerable) in half. Another occasion was one that hits home for many of us. There was a time recently that I was mandated to accept an experimental treatment in order to keep my job. I was able to stand strongly for my convictions, against this abuse of power because I was able to take a self-funded extended leave at any time. The confidence I was able to have in this situation, also showed my company that I was not bluffing.
The most common way that people try to exert control is through finances. The most common fears most people maintain are related to finances. So, taking control over this portion of your life puts the power back in your hands. Lastly, the more financially competent you are, the more free you are to care for and bless others where needed. How many times have you felt bad that you couldn't help someone that really needed it? How much stronger would our communities be if we were not always operating on the edge of our financial capability? Imagine a community of individuals who are capable and ready to support each other in the area of life we all find most threatening.
We haven't even gotten into the foundational Biblical principles behind financial responsibility, but that will be a good topic for another time.
So, build your emergency fund. Sell some non-essentials if you want to finish this step even quicker. Maybe you needed to do some downsizing anyways! Whatever you need to do, get it done. That is exactly what this step is. Don't move past this step until you have accomplished it, because we are going to be building on it periodically. So, you may easily get left behind if you skip over it. Remember that preparedness is more than cool gear and fieldcraft.
If you have any questions or comments on this content please reach out to me on my instagram linked at the bottom of the page!