This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and raising children at Childwild.com.
Recently, I’ve gotten into indoor rock climbing. It’s a challenging activity, and frightening when you first begin. You need to really push the edges of your strength and flexibility. Once in awhile, if you happen to glance down and see how far off the ground you are, it can be terrifying.
Which is to say, it’s a lot like managing your personal finances.
What makes rock climbing a fun hobby instead of a dumb stunt is the safety gear. You climb with a rope and a safety harness, so if you “fall”, you’re caught in mid-air. In most cases, you don’t really fall at all. You just swing out from the rock when you lose your grip. The rope holds you up and you can pick up close to where you let go. Falling like this can be scary if it’s unexpected, but it’s not particularly dangerous.
To bring this metaphor back to your money, financial security is about creating financial “safety gear” to protect yourself. A harness and rope won’t keep you from financial collapse, but there are tools that will.
Your Emergency Fund
The tool that springs most immediately to mind, of course, is your emergency fund. That cash cushion acts like the crash pad climbers use when they’re “bouldering” — climbing without a rope. It’s the safety net that will catch you if you do fall, and hopefully cushion the blow of any financial tumble you take. While an ideal emergency fund comprises three to six months of living expenses, even people struggling to get out of debt should have a thousand dollars or more set aside in a savings account. This fund will protect you from the financial repercussions of flat tires and sudden illnesses.
Having a solid emergency fund is essential to absorb the shock of a financial fall. Your goal, though, is never to need it. An emergency fund isn’t your first line of defense — it’s the last one. It’s what breaks your fall at the bottom. Ideally, as in climbing, you’ll be able to avoid falling at all. To avoid the falls, you need other “safety gear”.
Financial “Safety Gear”
No amount of income will protect you from financial trouble if you don’t manage your money well. You can have a six-figure salary and still be sinking ever deeper into debt. To be truly well-off, you want to become balance-sheet affluent rather than income-statement affluent. That is, you want to have a solid net worth. To get that, you need good financial habits.
Even more than an emergency fund, it’s the good financial habits you develop and commit to that will protect you from financial falls. Think of these like your rope and harness: They’re the safety gear that stops you from falling, rather than the crash pad that cushions the blow when you do. Unlike an emergency fund, which protects you from hitting rock bottom, these strategies aim to catch you in mid-air, so if you slip you can pick up close to where you dropped off. They’re the tools you can rely on every day as you manage your money. Do them right, and they’ll always be there for you.
Your essential financial safety strategies include:
- Spend less than you earn. This is the most basic tenet of personal finance. If you master it, you’re ahead of the game in everything. Without it, all the financial tricks in the book won’t protect you. You simply must spend less than you earn. Developing this simple habit doesn’t come easy to many of us. Like anything, you need to gradually build up your strength. Once you have a firm habit of spending less than you earn and saving the rest, you’ll be in a much better financial position. Even if you do nothing else. When you habitually spend less than you earn, you’re poised to absorb an unusual expense without touching your emergency fund. Even better, you’ll be able to consistently grow your savings.
- Track your spending. Keeping track of every penny you spend and earn is one of the most powerful tools there is for taking charge of your spending habits. When you see where your money goes, you can act to reduce costs in big and small ways. Without that tracking, you often find yourself spending carelessly on things that don’t really further your financial goals. You can track your spending with a variety of financial software products. I use Mint these days, because it has a nice set of features and a good iPhone app. You can also use a simple Excel spreadsheet or even a pen and paper. Do what works for you. Just be sure to do it.
- Develop a spending plan. A spending plan, a budget — call it what you will. Having some clearly articulated intention for how you’ll spend your money helps you avoid frittering it away on small luxuries when you want to be saving it up for something big. Your spending plan will also help you predict upcoming expenses, and put aside the money needed to pay annual bills and large purchases. A spending plan is like the other side of your spending records. While tracking your spending shows you where your money has gone, your spending plan shows you where your money will go. Both are essential to successfully living below your means and managing your money with intention.
Mind Over Money
Cultivating good financial practices isn’t easy as easy as buckling on a climbing harness. Developing these habits is hard work. As I mentioned before, it pushes at the edges of your strength, flexibility and endurance. I believe this is especially true if you’re getting out of debt.
If you’ve been in debt, you probably had spending habits that exceeded your income at some point. Even if that’s not the case, if it was a sudden catastrophe like a major illness or job loss that pushed you into debt, climbing out is hard. It takes endurance, and a willingness to keep going when it seems impossible. It also requires flexible thinking to cut expenses back to a minimum, and strength of will to keep up with your essential financial safety strategies.
Finding these qualities in yourself can be a challenge. That’s why, along with the good financial practices outlined above, it’s a smart to do something to cultivate strength of will, flexible thinking, and endurance in yourself. It doesn’t have to be about money. Like my rock climbing, or the yoga practice I’ve written so much about recently, these things aren’t directly connected to personal finance, but they do call on some of the same strengths. Because I’m doing these things, I have more strength, flexibility, and endurance when I sit down at my desk to do my money mojo for the week. That carries over into staying more on top of my finances, and more motivated about my goals. Finding an activity that can build these qualities in your life is a gift.
You don’t have to spend a lot of money to do this — or any money at all. Take up running, or sitting meditation, or writing morning pages. Even just keeping a brief journal where you jot a sentence or two each day can help develop discipline, flexibility, endurance and strength. Again, do what works for you. Just do something.
What do you do to stay motivated and to keep your financial “safety gear” intact?
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Great points Sierra! I think the knowledge of these steps are powerful, but without application, they are useless.
The hardest part in achieving financial security is acquiring financial discipline! This really cannot be taught. Something needs to spark inside someone and give them the realization that they are not going down the correct financial road.
If there is no spark, all of the finance books in the world won’t help.
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I like the analogy of safety gear. Good one.
In the mind over money section, I’d also add something about having mentors who can teach you. I think that’s a lot of what keeps people coming back to GRS. Sometimes you need to have an example in front of you to see what you can do.
I think of myself as a pretty good money manager. But I work with clients who, despite having an income below poverty level, still manage to save money. I bow in humility before their amazing money management skills. And I’m inspired to make even better decisions for myself in the future.
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Cute post.
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I like the analogy, but I thought you could have used it more to talk about safety instead of just a shell to reiterate the basic principles of the site. Would be a good tool to talk about different types of life insurance, short and long term disability insurance and other things I would consider true financial safety gear (along with an emergency fund). Still, a good simple reminder of the basics.
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I agree! Good post, but I was really surprised to see insurance left out of the mix. Insurance works hand-in-hand with an emergency fund (like covering deductibles and filling in the gaps.)
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I don’t understand what kind of financial “falls” you’re talking about that don’t immediately land you in your emergency fund (or some other savings account with a different name).
Job Loss? Straight to the emergency fund.
New roof for the house? Generally an emergency fund thing.
Big medical bill? That’s textbook “emergency fund” there, isn’t it?
How is tracking your spending preventative for any of these things?
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Not for me, Tyler. After figuring out that we will always have house repair issues, we created a ‘house repair’ sub account. I have a medical account too, for copays, appointments, etc. A job loss would probably end up drawing from the emergency fund eventually, but I’d be more likely to drain my travel fund and my play fund first while buying time.
Tracking spending was beneficial to me, to realize that all these categories are things that I’m going to spend money on. So I might as well save for them and expect them, instead of dipping into the emergency fund eveery time. This year – adding a ‘taxes due’ sub account. Oops.
Sierra – count me as +1 for the climbing wall. Love the sensation of freedom and achievement. And have you seen this month’s National Geographic about free climbing in Yosemite? Those folks live their whole lives without protective gear…
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I guess maybe my problem with this is that I view all savings accounts as interchangeable. Taking $10,000 from the “medical fund” instead of the “emergency fund” still leaves you with the same amount of money in the end. If the emergency gets bad enough, then all your savings accounts eventually become emergency funds anyway (you’re not going to refuse to pay for a live-saving medical procedure because the money is in a “travel” fund).
Maybe doing the planning helps you to recognize exactly how much emergency savings (regardless of the names you use) that you’ll actually need.
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I think when you don’t have very much money, you can only afford one emergency fund ($500/$1K, etc.), and when you have a high income (and relatively low fixed expenditures) you only need one emergency/slush fund because your income next month will refill emergency funds with very little sacrifice.
For the folks in the middle, the mental accounts must help a lot with planning.
And actually when deciding how much we needed in savings this summer (since we’re on 9 month salaries), even though it’s one account I had to mentally tag it: 3 months regular spending + 1 month “emergency” + school tuition for next year (because there’s a discount if we pay upfront, but we don’t get paid until October). So I guess that even though most of the year our income is high enough not to need those separate tags, when regular income isn’t coming in, we do.
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Tyler, I think it just depends on what works for different people. We have a “house fund” for home maintenance/repair. Last summer, we spent $3k to get bees and honeycombs out of our siding and repair the damage, and we paid for it from our house fund. This meant we had $3k less for a planned but non-essential house project, refinishing the wood floors. We could have considered the honey bee infestation an emergency and used our emergency fund, and also refinished our floors, but I felt better knowing that our emergency fund remained untouched, and we refinished the floors a couple of months later. I know it’s all mental… we could have done the bees and floors at the same time, then replenished the emergency fund later. I know this! But my husband and I made the decision that helps us sleep easiest at night.
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I understand what you’re saying, and I echo TRB’s comment.
My husband and I have been saving into our emergency fund for almost a year now, but any time an unplanned expense came up, it came out of that fund.
We’re slowly, but surely, getting a handle on those “unexpected” expenses by trying to anticipate them. I think this relates to the post earlier of tracking expenses and then making changes. We have a medical fund to pay for any co-pays we may have. We have a dog fund to take care of our pooch. We don’t have a “new roof” fund, because we rent!
That money for those smaller funds came out of what would normally be put to an “Emergency Fund,” but we’re trying to keep the true “Emergency Fund” for emergencies only. It’s still growing, and it’s not being hit as often since we’re aware of our more likely future needs.
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On Tyler’s point, I’m sometimes wondering why I have an emergency fund at all, beyond about a month of income stashed away just as a nice cushion for unexpectedly large cash flow months. The standard 6 months + of expenses for emergencies sitting in very low interest earning accounts (1.25 or 1.5% is common, inflation at 3.3% now, losing money!) just doesn’t seem to fit me.
Picking some of the things mentioned:
“Job Loss?” – the likelihood of this happening is extremely remote, but it is possible. In my case, as a Chartered Accountant specializing in taxation and compliance with 10+ years of experience in my industry and great connections, unless the economy was terrible, great depression era terrible, I’d be able to land another job in a few weeks or sooner with similar income. The last recession was supposedly the worst since the depression and I changed jobs during its peak in summer of 2009 with mutliple offers for a 40% raise from my previous position. So, I know of what I speak here.
Plus – I would get the maximum employment insurance and am contractually obligated to get severance pay, accrued vacation pay, etc. So, yeah. This plus cutting my lifestyle would enable to live for many months without a job if I was laid off even if I had no savings.
“New roof for the house?”
I rent. All “emergency” maintenance is covered by my landlord and/or renter’s insurance.
“Big medical bill?” Covered by the Ontario Health Insurance universal coverage, whether I have a job or not. Short and long term disability is offered through work and I take both of them and pay extra for the max coverage which is very generous (I work for an insurance company).
“Unexpected auto expense?” My car collects dust in the parking garage. I walk to work. If the car was destroyed, I’d go without. Insurance would handle any 3rd party damage or liability.
On top of this, I live close to a huge amount of family and friends who I am very close with and support who would/could help me with food/shelter/etc if something extremely crazy occured until I could get back on my feet–and I am not too proud to work *any* job from driving trucks to cleaning toilets to be independent.
In conclusion: Short term and long term disability, severance pay and unemployment insurance and in-demand-skills, auto insurance and walking to work, renting and renter’s insurance, a support network of loving family/friends, all these things substitute for a large emergency fund in *some* cases. I also do have a large emergency fund, but I’m planning on using it for a downpayment someday rather than just keep it earning 1.5% at ING.
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You’re supposed to determine the amount of your emergency fund based on your situation. Other’s have different needs, which may require a larger emergency fund. Here’s why we have a large emergency fund to make us comfortable:
Job Loss-It’s in the 50/50 range if my spouse will keep his job. We have a strict schedule of volunteer activity that we put first in our life. Our secular work supports our life goals. If his job (of 11+ years) won’t let him keep the part time schedule he plans to quit. Things are fine for the moment but always a potential concern. Finding new pt employment of the same wage (high due to 11+ years) probably won’t happen. We cannot live on the amount of unemployment insurance he’d receive (after 6 weeks when you quit). I work seasonally and it’s not enough to live on.
New roof for the house – We own. If our furnace goes out in winter it would be an emergency for us. I feel this should be saved in a maintenance account but we don’t currently have one.
Big medical bill – We are covered through public health. However, if we disagree with the treatment they are willing to provide we’d need money and don’t have it saved other than in our emergency fund. Also, I’m not sure they cover ambulance if it became necessary.
Unexpected auto expense? – At the very least we’d need to cover our insurance deductible. We live in a place that has poor public transportation. In addition, things are not close together, we don’t have enough time to bike. It’d take my spouse an hour to get to work and an hour home. It’s really cold and icy 6 months out of the year here biking is impractical most of the time.
The family that we live close to does not have the financial means to support us.
The tone of your comment seems haughty. A single guy in a place that has health care paid for probably requires the lowest dollar emergency fund of anyone I know. I would not agree that this is the same for a single girl that doesn’t know much about cars.
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Sorry! Didn’t mean to sound haughty, just taking the theme of the article that the actual emergency fund comes last in the line of defense and if you can build up your other safety net (integral skills, insurance, connections, good phyiscal health, close family/friends) you can rely on less money sitting in an ING account losing money to inflation. As with all personal finance, YMMV!
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Excellent post. I enjoy creative and vivid analogies and rock climbing paints this picture well.
To use another analogy, bicycle safety doesn’t begin and end by simply using a helmet. The helmet, is your emergency fund, it may or may not save you. Safety begins with safe riding habits, watching the traffic, following the road rules, etc.
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Great post! I am currently working towards building up an emergency fund, and other savings accounts. It just takes discipline.
I do agree with “Pamela” on the need for mentors, too. That is one reason that I spend my time visiting the finance blogs. As for the discipline portion, that is why I created my own blog and intend to use it as a motivator.
I will use all resources available to me to improve my financial life.
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Tracking your spending is a must for anyone that is looking towards working for their financial freedom. This is the real key because knowing what you spend helps you create your financial goals and create an effective budget.
Great post Sierra! I liked all of your “safety gear” perspective.
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Phenomenal post, Sierra – I really enjoyed the rock climbing analogy.
I agree wholeheartedly with the point about the emergency fund being the last line of defense as opposed to the first, that’s critical. If you don’t have that mindset you’re constantly working to replenish your savings with the unintended consequence being your savings could become stagnant and woefully inadequate to address any pitfalls life may randomly throw your way.
For us, I would contribute to our savings and drain it fairly routinely due to a lack of planning and foresight. Our current fiscal goal is to pay off our vehicle, in my haste to make a lot of progress I would send too much money prematurely and then other small things would come up, like us needing more gas, having to pick up more staples for the grocery store, the unexpected gift, etc. – I would have to run to savings. The Christmas season would come around and it’s like an atom bomb would hit our savings. I will start the Christmas fund this June. I also temper my excitement and kind of “dollar cost average” my debt payments, I send it in little chunks progressively over time. This way we will not be in a bind before payday.
Paying off debt packs such a punch, in terms of a psychological boost. I readily concede that saving is an indispensable part of my plan for us to be financially independent, it’s just not sexy. I love logging in to our creditors’ websites and see the balance freefalling-LOL
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Nice try tying physical activities to finance, but I think that pretty tenuous. Why is it so rare that we see financially savvy sport stars?
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Could it be because they have not managed to link the competencies that sport gives them with these required by savvy finance management?
Maria
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This may be your best post ever. I enjoyed your illustration.
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“What do you do to stay motivated and to keep your financial “safety gear” intact?”
I think about what Future Me might want. Right now I’m in university, living off my student loan because my long hours in the workshop combined with cheerleading haven’t left much time for a job. What do I think I will want in the future? A workshop of my own? A city apartment close to design teams and galleries? A smallholding out in the countryside?
Thinking about what I might want in the future keeps me on track financially. Sure, I end up turning down a lot of nights out with friends, but would I rather spend £50 on travel, food and drink for a night or keep that £50 as a budget for the whole week?
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I agree with some of the other posters that this was simply a regurgitation (hope I spelled that correctly!) of advice that we have all seen many times on this site and others like it. If Sierra had the desire to write about her passion for wall climbing (love the irony of her name and her hobby), couldn’t she have spent more time on the final paragraph of her article where she spoke about how discipline in other aspects of her life help her with her finances. That’s an article I would like to read that I haven’t read a thousand times before.
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IMHO this was Sierra’s best written post. Even if we’ve heard the same message a thousand times before.
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How about this article next week –
“I saved tons of money by not wasting my time climbing a fake rock wall at some over priced indoor park for spoiled urban adults.”
Maybe that would help pay your debts. If you want to climb rocks, why not do it for free outside?
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Anne, that was hilarious and a very accurate description of what can be a waste of money. I decided to give up golf today because
a) It is expensive
b) I am stressed out when I play. I shoot in the low 80′s but want to hit every shot perfectly, and instead of being frustrated for 5 hours a week, why not spend that time and money on something more worthwhile?
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Good for you Evan. Golf is a good walk spoiled.
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Ouch. What happened to conscious spending — ie saving on things that matter less so you can spend on things that matter more? To each her own, I say, and all the more power to Sierra if she wants to spend money on indoor rock climbing.
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She also may not be at the level necessary to climb outdoors. Or she may not have the right friends who are more experienced to go with her.
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That’s not my point. Would you being saying the same thing if she wrote an article about how her jimmy choo collection taught her about her personal finances (when she still had debt)? I’m pretty sure I wouldn’t be the only one ciritizing that article.
I don’t mean to criticise how she spends her money. Do what you want, just don’t bullshit me. There’s this idea that certain hobbies or spending habits are untouchable in terms of criticism. No one here would tolerate a writer who continues to buy designer clothes when they had not cleared their debt. But if it is a form of exercise or something like travel, suddenly it is filed under conscious spending.
Yes, parents and people in debt need hobbies and a life. But people in debt also should not TAKE UP expensive hobbies. I’m not taking up weaving right now and I don’t even have any non-mortgage debt. But I do have a young child. I’d love to take up weaving, but it’s not responsible now.
It is silly to take up an expensive hobby and then say you’re learning about personal finance from it, when that money could be put towards debt (or other pragmatic matters).
What I know about her is that she has two children she home schools and she is a freelance writer. I also know she has (or had) a condition that may make it difficult in the future for her to earn consistent income. (A freelance writer with an msd in her HANDS, isn’t an easy situation.) Is she self-insuring for her disability (since no insurer will probably take her now).
Last year she said she didn’t have enough money for the software that could have helped. She wrote an interesting article about making do when you have such problems. But now she has the money to take up rock climbing? And she wants me to think it’s teaching her about good financial habits?
A little rich imo.
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Anne,
There is a difference in constructive criticism and downright harsh. Your writing tone is too harsh! If the article is not to your liking….just more on to another blog. What is the big deal?
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I think this comment is unnecessarily malicious and incredibly infantile. The only person that has a right to decide what to do with Sierra’s money is Sierra and her family. Your opinion is simply irrelevant.
Furthermore, on a distant but related tangent. I think Sierra is becoming a victim of “group think.” Everyone seems to be hypercritical of Sierra’s contributions as if every post has to be personally tailored to their sensibilities. I also think people feel emboldened when other people criticize an individual.
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It is true that some of Sierra’s posts have included misinformation that she did not address or correct in the main post once the incorrect information was pointed out. That is what I consider to be poor reporting– badly done research and misinformation without correcting the final product. Misinformation in financial settings can be dangerous (and even more so in psychological settings!).
She’s been doing a lot better recently. This post is fine. I would be happy seeing more like this. Sierra’s posts are best when she sticks to things she knows about personally. Her writing is best when she talks about her own experiences and her own thoughts. There are other writers to do the heavy research lifting.
I believe that each post should be judged on its own merits and I also dislike the pile-on.
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It’s not free to climb outside. Gear costs hundreds (as in many hundreds) of dollars to purchase.
Clearly, you don’t rock climb.
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Spending less than you earn is the central theme of personal finance, and overall money management. Us bloggers really just provide a way for you to do that better, i.e. budgeting, coupons, online shopping etc.
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Wow, these blog posts are getting a little silly and extraneous and redundant. I suppose that the basics of finances remain the same, so one is tempted to repackage them in post after post. Which leads to silly regurgitations, such as “rock climbing as a metaphor for personal finances.” Really?!
JD – I know that you think your financial life is boring, but anything that you write about your actual personal finances is a million times more interesting than these “fluff” pieces that beat metaphors over the head or nonsense about extremem minimalism and the rest.
Having fewer posts overall is better than having repetitive stuff like this posting, which just gives the impression that the author wanted to come up with an excuse to write something – anything – today to meet her writing quota, to be published (just for the sake of being published, even if it’s not original or useful) or to get paid.
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I think the point that was really best and and not said often enough is that the emergency fund is not the first line of defense. In what I’ve read, it often is made to seem like the be-all-end-all of financial defense and security which is not necessarily a good way to look at it. Plenty of “emergencies” are non-routine expenses that don’t get factored in when people are looking at their spending habits. (I mean, come on – who’s car has never broken down?) When you’re climbing out of debt, it’s certainly better to use that than your credit card, but when you’re a bit more secure, it can be counterproductive.
In keeping with the rock climbing analogy, I think that it would have been good to also talk about points of contact. If you’ve got at least three points of contact (perhaps income from a job and some investments plus some sort of insurance to get three in this case) it’s not so critical if one of those points falters. If you’re relying on one or two, you may need that harness or the crash pad at the bottom more frequently.
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I really enjoyed this post. As to running as a way to develop patience and persistence – absolutely. This is why I became a long distance runner – you have to plan, you have to be parsimonious, have to use your head to develop a strategy and the main thing – need to keep pace.
Running and finishing a marathon is just like paying your debts off – I just want to cross the finish line and celebrate.
Maria
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I liked the post – yes, it’s regurgitative of some of the basic tenants. But differenrt approaches speak to different people. I also like the point that like any other pursuit it takes time, patience, and most of all PRACTICE to be good with money. Mental muscles need to be flexed just like physical ones.
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I liked the last part, “Mind Over Money,” and the need to cultivate endurance and flexibility through different activities.
I don’t know what I do for that specifically, but having become a GTD convert in the past month I can attest it helps me persevere and be flexible at the same time. I used to be just flexible, and forget things, ha ha ha.
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Although we’ve had a year over year increase of 30k in our savings, we actually feel less well off this year as compared to last. The reason for the drop in sentiment is that at the end of last year we broke our single savings into several smaller accounts – vacation, tuition, car replacement, and e-fund.
We figured our e-fund needed to be a minimum of six months of expenses and then we took the surplus and put it into the sub categories. Now when unforeseen expenses have come up we’ve pulled funds from the vacation account rather than the e-fund. And that’ll translate into more low brow meals – not a big deal for our brood, and much better than pulling from an e-fund when we didn’t really need to.
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The safety net is most important. It allows you to take risks. That’s why I’m focusing on building up our emergency fund.
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Hmm… somewhat the analogy does not work too well for me. May be because when I think about rock climbing, I think of the importance of technique more than the safety gear. Balance, legs and core strength, and economic placements and movements are what crossed my mind. I’m not saying that safety gears are not important, I always wear them when I rock climb but they feel so basic. Somewhat it’s not ringing right to me the analogy of PF and rock climbing.
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i’ve never placed much importance in a sizeable emergency fund until recently. All this while, i’ve focused on property investment as my safety gear. realised now that it’s not a very liquid vehicle and as such am moving some funds into cash & stocks.
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Rock climbing doesn’t do it for me either. Always seemed kinda silly and dangerous, whether on a real mountain or on an indoor plastic one. Why don’t people do more normal things, like jumping out of airplanes (which I have done; used to skydive. Now that’s another story…).
But whether the analogy fits me or not, I like the ideas it being used for: to give people a “hook” to understand some personal finance concepts. BREAKING NEWS: Are we shocked, shocked, shocked to find out that not everyone will respond to the same kind of story in the same way!? Different authors with different approaches and different experiences are needed. Variety is a good thing. That’s why there is more then one kind of flavor at the ice cream parlor.
Don’t ask me to like every single one.
One comment about the three items listed for “Your essential financial safety strategies include”. I would have thought there would be a fourth item, something along the lines of “automate savings” (even if starting small) or “pay yourself first” or some such.
Anyway, good article.
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I think it’s preposterous that folks seem to read this and other finance blogs expecting the authors to reinvent the wheel. Everything you need to know you probably got the first time you read through the home page-and then went on to every other post you had time to read. I know I did. I come back because there is always another way to view things and having other voices give their experience is a good thing.
Just because every post is not 100% relevant to you doesn’t mean it has no value or significance to others.
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I am one of the most undisciplined people I know. I appreciate Sierra’s analogy and the stories others shared.
One of the things I am most disciplined in is ignoring other people’s opinions of my personal decisions. Even with that lack of guilt inducement, and a very meandering life path I can say I see the top of the mountain.
I now have an emergency fund, a full pantry and do what I love daily. Because my debts are getting smaller, I am able to focus more on doing what I love to do.
My emergency fund was smaller than my ego for a lot of years but GRS and circumstances helped me become more disciplined there.
Thanks for dodging the stones others throw Sierra. See you at the top!
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I love the kitty pictures, and you have some great tips!
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All the listed strategies seem to just allow you to funnel more money to the emergency fund, which as Tyler said, is the most logical choice in any significant “financial fall”. (By emergency fund I mean basically any savings set aside for future unexpected expense – whether the expense itself is unexpected or the timing of the expense is in doubt.)
I would have went a different direction here and mentioned things like:
1) unemployment compensation (job loss)
2) short/long term disability (medical issue)
3) DIY skills (instead of throwing money at a problem, learn how to fix it yourself)
4) medical insurance (medical again)
5) life insurance (the ultimate financial fall – death of someone the household depends on financially)
6) multiple streams of income (job loss)
7) social network (job loss/medical issue)
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You don’t fall, unless you’re lead climbing! And the fall is the most exciting part!
Enjoy climbing, it’s amazing!
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My wife and I just got married last January and we’ve been looking for investment opportunities. But we agreed to set aside around 100,000 pesos (about 2,200 dollars) as emergency fund. We’re about to hit that amount and then we’ll look for investment opportunities.
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I don’t think that metaphor is used appropriately in this article.
Is it an analogy? Yes.
Is it a metaphor? No.
Definition of METAPHOR
1: a figure of speech in which a word or phrase literally denoting one kind of object or idea is used in place of another to suggest a likeness or analogy between them (as in drowning in money); broadly : figurative language — compare simile
2: an object, activity, or idea treated as a metaphor
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