Dave and Reb take one key of financial fitness on today’s show, and discuss how it can help people “plan what they spend, and spend what they plan.”
Building an emergency cushion is one of the healthy habits coaching clients at More Than Enough are encouraged to develop as they recover financially and pay down their consumer debt.
“An emergency cushion is like having your own self-funded line of credit,” Dave says. “But with your own cushion, you don’t have to go into debt when emergencies happen.”
Building this “cushion” means saving $1000 to $2000 in an account for “emergencies only”. Emergencies may include a plane ticket to attend a funeral, an unexpected car repair or house repair, or helping a neighbour with their emergency.
“Emergencies do not include birthday or Christmas gifts,” Reb says, laughing. “Although some of us do treat those events as emergencies, because we haven’t saved up for them.”
Building an emergency cushion is part of the journey of debt recovery. Listen to the show to hear more details, or if you are in the Ottawa area, you can attend a free financial fitness seminar hosted by More Than Enough the fourth Tuesday of every month. At the seminar you will learn this step, along with others on your journey to financial freedom. Click on the financial fitness seminar button to register, that you will find on this website’s homepage.