Emergency Fund: How much do you have? How much money do you have that you can easily access if a disaster were to happen? If you were to have some unexpected expense would you be able to cover them? Would you like to have a little more financial peace of mind? Learn tips for creating an emergency fund.
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Certified life coach, author & award-winning professional life organizer Julie Coraccio shares steps and tips to support you in creating the life you choose, deserve and desire through decluttering your life, mindfulness and how to organize your life.
About Clear Your Clutter Inside & Out Clutter is stuck stagnant energy and prevents you from creating the life you choose, desire and deserve. We discuss clutter in all its forms: energetic, spiritual, emotional, mental & physical, relationships, health, finances and more. We share tips and take action steps for clutter free living and how to organize your life and death with end of life planning. We’re thinking outside the box on areas where people might not realize where clutter is blocking them. When we remove clutter from our lives we can discover our passions, lead the extraordinary lives we are all meant to live and share our gifts with the world.
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Transcript Emergency Fund
Julie Coraccio 0:02
Today on clear your clutter inside now, we’re talking about having an emergency saving. How much money do you have that you can easily access? If a disaster were to happen? If you did have some unexpected expenses, would you be able to cover them? Or would you go into debt? Would you like to have a little more financial peace of mind and learn tips for creating an emergency fund? As we continue our month focused on welcoming 2021? Do you control your clutter? Or does your clutter control you? unclear your clutter inside now. We’ll teach you awareness as well as action steps to create change in your life. Come on, let’s get started. Today’s episode was inspired by a few things. When my mom got sick, I had to fly to Minnesota unexpectedly. And this is at a time people weren’t flying much. But the price of the ticket from Raleigh to Minneapolis wasn’t going down any. And then I left after about four days, we didn’t know I didn’t have an open ended ticket. But anyway, I had to change my ticket. They weren’t doing any relief on that at the time. And so I think I ended up having to spend eight $900 and then I stayed with my dad. So there wasn’t the cost of that. But there was a cost to get down to Rochester. I stayed in the hotel the night before I left so probably ended up to 1400 1500 bucks. Then when Athena got sick, I got some bad bad vet advice. So that ended up being probably three to 4000. taking her to one vet well starting with the emergency in July with things starting to go wrong. And then before she passed in November, and then I was so distraught and I wanted her to be at home, I wanted her to spend time outside before she went on to the next great adventure and I wanted her privately cremated I was like Tony, we’re moving. I’m not leaving our here. We’ll start our own pet cemetery once we get settled, but I’m not leaving her by herself in North Carolina. So that was probably three to four grants. unexpectedly. My business and I lost a lot last year right up, I made the conscious choice that I wasn’t going to see clients because what if I was carrier, but so I lost a ton of business. We were hit hard last year now why I lost business. My husband got a lot of overtime. Now I’m sure he would have preferred that I got more business and he only worked 40 hours. But that’s just sometimes the way it comes out.
We were able to get through last year. And then having my surgery and having to pay comp payments were able to get through last year because of my savings. When I left Los Angeles almost been 14 years I moved to Raleigh in 2006. So yeah, well on the 15th year, I was very fortunate. I made a bunch of money when I sold my condo because people were crazy out there. And I use 20% of it to put down on my house when I bought a house in Raleigh, and I used it to pay for our honeymoon, you know, so I’ve been pretty good with it. And we’re on your 15th and I still have money left now we’re getting near the end. But again, I have that that helped pay for safety that helped pay for my surgery. That because I am good with money. And I could have been better investing it but I’m just saying because I had that savings, and didn’t go out and buy I don’t know Lamborghini or something and was smart with it that has allowed us to it’s really helped us. And again last year with everything. Many people were stretched thin, you know, because one of our strategies has been to pay our mortgage off quickly had we if we were going to stay in North Carolina, we would have had it paid off in two years. And we were very adamant that that’s what we wanted to do now because we we paid and paid and paid overpaid in the last couple months of last year. And this year. We’re like we’re just gonna overpay a little not a ton because we’re moving and so that’s something because we had done that, that if we had to drop down because of you know me losing business, we that was helpful. I mean, that’s a difference of over $500 and that we would be able to find in the budget if necessary. Now I want to be really clear If you’re listening or watching, you probably aren’t living paycheck to paycheck. So have a moment of gratitude for that. I want people to understand that that’s not who I’m talking to. There’s not we don’t you know, somebody who are living paycheck to paycheck, and it would probably be close to impossible, though I believe anything’s possible. But it’s much harder for people who are living paycheck to paycheck, if that is you, because I know people live beyond their means. I know people that might have a ton of possessions or they say house rich and poor, otherwise, I’m not sure what the expression is, well, first of all, no, you can do it. So absolutely, positively believe in that. But I just want to understand that I am coming from a place of compassion with this. And I think that this is important for peace of mind. Not having an emergency fun, creates mental clutter. I remember reading living in Los Angeles, Cheryl Richardson, and this is what convinced me to get a cell phone because having been in an accident, and having no way to contact anyone that fear and stress is still in me. So you have that drip, drip drip of mental clutter at the back of your mind, I don’t know what if what what happens, you know, I could be one step from disaster. And I think many more people in our country are in here in the United States, and probably all over the world, then then we understand. It can create physical clutter. And if you don’t control your spending, you’re like, I’m just going to buy, buy, buy when I can be saving. Because remember, all I want you look Take a moment, look at all the physical clutter around your house that was money at one point, causes you emotional clutter of stress. And probably most of you have experienced a time when maybe you needed money and didn’t have it. And you know how stressful that can be. Obviously, if you’re stressed out, it’s going to create health clutter, and many, many forms. Not having an emergency fund can cause a strain in relationships, you know, people are on different wavelengths in a relationship, it can cause some stress. And finally, it can create financial clutter. Because if you can go into debt, a couple years ago, we had to replace our hot water heater 1500 bucks, and I was kind of funny, I was like, we will shower at the gym, I am not paying extra for them to come on the weekend, I don’t care if it’s cold. That’s the way I’m gonna save money. Why create emergency savings. Now hopefully the examples of clutter that I shared would motivate you. But here are some other things to think about. It can prevent you from going into debt or adding to your debt. When I had a crisis, and this was years ago, I was living in Los Angeles, I think I was making $28,000 living in an apartment by myself. And it just it went very quickly. And after this crisis, I remember I bought a leather jacket, I think it was like maybe 300 bucks or 200 bucks anyway, I think I ended up spending a grand, which Okay, if we’re talking 20 years ago, maybe close to 30 years ago,
I didn’t have enough time. After spending, you know, my monthly everything I didn’t have enough. So it took me I want to say a year and then you have interest. And again, a thousands not. So maybe I don’t know, two, three, maybe held on for I don’t know what the interest how that all works out, or inflation or whatever that is. But it took me a year to pay off the credit card. And I have to tell you, as someone who pays for credit cards in Philly, that was a really stressful year for me, because it was hanging at the but I have debt. I’ve got a you know, I didn’t have a condo at this point. And I was stressed out for a year if you have savings that can stop you from going into debt. And so if you have to replace a water heater, you don’t have to worry about charging that 1500 dollars to your credit card and figure out how am I going to pay that off. If you create a budget, which I encourage you to do, and often look back, I don’t know if I’ve done anything on budget. I know last year I did no spend days. So check that out. That might be a good podcast for you to listen to as well. You should always add a line for emergency savings. And that also helps if you have it live because you might forget to budget something right when you’re planning your budget for the year. And something comes up you’re like oops, I didn’t budget for that, like clothes is probably something I wouldn’t budget for because I so rarely buy clothes, but I’m sure that I will buy clothes at some point this year. I’d have to think if I’m sure about clothes last year, nothing’s coming to mind. But anyway, that gives you some cushion. You’re also going to want to have an emergency savings. If you earn a one income family. Maybe you’re single like I was forever or you’re in a family where last year really for the most part we were in one income family because you know I stopped seeing clients at the beginning of March. And, you know, I did online coaching, I sold some books, but nothing compared to what I had. So in effect, we were one income last year. So something happens, you can be in trouble. You know, if you’re self employed like I am or a contractor life happens. For me business has been cyclical. And so one of the things I’ve always done is, you know, what I made this year I put in a savings, but I used it like I did get the website redesign and I have to pay for that. And there were a couple other things and getting some more book covers, design, whatever. So everything I put in savings, to be able to pay and by what I used to and then to start this year off with money in the bank, you have to you know, life of as a contractor can be up and down. If you own your own home, you have taxes and you have insurance and you have repairs, like an unexpected hot water heater. So there are something if you have an emergency savings again, you’re going to be able to cover because no one expects our hot water heater to go right. And then when it does, if the hope you have that and savings. If you live away from your family, people that you’re close to now we’ll be moving back to West Virginia this year. But you know, my mom ended up getting sick in Minnesota. But that costs I drove every month spent a third of my month in West Virginia. Well I had to pay for gas tolls, which West Virginia con now. I’d rather pay you 112 dollar flat fee. Hey, I’m such a big spender I’d play you 15 bucks to have one tollbooth instead of having to stop at three. Okay, but that adds up if money were tight, 12 bucks makes a difference. And it’s 24 round trip but you had to pay for gas. So if you have to travel if you’re going from New York to LA that’s a plane ticket. If you have medical conditions or concern,
maybe you have something on going you know a friend of ours just found out he was misdiagnosed now he’s really fortunate. His medicines like 800 bucks a month. You never know if something’s going to change. You know, my friend Vince who has the most awesomeness health plan anyone I know, his health plan chain. Now I tell him he’s not allowed to complain, because I think maybe his copay went up 25 bucks or something ridiculous. I’m like, Man, you have the best health care plan anyone I know. But if our friends health changes, plans, it’s an $800 a month medication that’s almost 10 grand a year in red. So you might have something ongoing. You know, if you are diabetic and need to test daily, if you get sick and miss work, and you don’t get paid if you’re in that situation. So your health is maybe some reason might be a motivator for you to start emergency savings, then you might have goals, you might have financial goals, you might want to travel around the world someday. And if you don’t go into debt, that’s going to make it easier to do that, you know, we had our plan was to pay our house off within two years had we stayed in North Carolina. Now we’ll see where we end up in the market, it’s still really strong here. wheeling them all places where we want to buy is where because we want to be on a ranch, we want to be on one level, it’s a hot market and wheeling. Like really. But you know, our goal is we said we’re not I’m like we’re not going to bed or house. And our goal still is might have to stretch that to five years. But I’m not willing to be you know, house rich or house poor, whatever the thing is, and because we’re motivated to pay off our mortgage, that is allowing us to put more towards savings and get that done and also have some emergency money. So those are just some things to consider. Like what would motivate you to do this because you know, it’s not easy. If your friends go out all the time and you’re like, man, I really want to do that. What are what’s going to motivate you to say you know what, I’m going to be disciplined here. And instead of spending this I’m going to put it in savings. The 21 day declutter your life challenge focuses on becoming aware of your clutter and then taking action in this challenge to clear clutter from your life or focusing on physical, mental, emotional, spiritual, energetic, financial, health and relationship clutter. The challenge will run from Sunday February 7, through Saturday, February 27. It’s free. There’s also a $25 paid version where you’ll get a PDF journal, a private Facebook support group and to one hour coaching calls. Learn more at reawaken your brilliance calm. Come join us how much should you have different people We’re gonna say different things. So what I would say to you is start out with a goal. So I’ve seen anything from three to six months to a year. Some of the things you’d have to consider and again maybe all right now you can do is five bucks a week, maybe it’s $1 a week and that’s okay just start somewhere. What things would you have to pay for if something were right rent or your mortgage, your utilities, food, medicine, those are things you have to pay for. And then you can think about what things are optional cable TV, and I know if we’re still working at home, you know, who knows how everything’s gonna shake out this year. Cable TV might be a necessity for mental health and you know, partly joking, but I’m partly not you know, I have no judgment this can be very stressful on our mental health. So whatever it needs, you need to do to happen hairdresser. I got a haircut once last year. I’m hoping when I go to West Virginia, I can use hair dye again, I’m not ready to go completely gray guys, I’m just not there yet. The hairdressers optional your nails, most likely optional her learn how to do them at home and decide what the right amount for you is. And just again, just begin. I rarely drink coffee. I have to admit I don’t get the Starbucks run. I’ve never gotten that. And my friend Vince, I’m have to tell him I’ve mentioned him a couple times. Now on the podcast, he should invest in Starbucks, the guy is there all the time. Now he doesn’t buy the Frou Frou coffee like I don’t like coffee. So mine’s got to have some flavor and stuff. He I think stinks. It drinks it straight black. So he buys the cheaper stuff. But think about that. If you go there, it’s like six bucks for free for drink. If
you go there every morning for work, you’re spending like 30 bucks. Now I’m not going to take the time to do the math for a year. I think I did that on no spend days. But think about that’s something you know what I get pumpkin spice flavored coffee and do it at home. You have to really think those things through where is it that I can find some extra money. Also want you to think about something else. When we got the IRS money last year, the COVID Relief Fund, and almost all of it went to taxes except that I held back some so that I could hire a couple that was struggling, they’re about to have a baby. So I hired the husband to do some weeding and some yard work. And to me that is part of the budgeting to have some kind of charity to give back in some way, whether it’s not going to be counted, like hiring someone to do something that’s just good. That just as a way for me to give back. Because I believe what you put out there you get back. And so by paying it forward in some small way, when I tried to support a small business each week, my contribution wasn’t gonna make or break them. But it was something and even if it wasn’t a huge monetary fund or amount, I would hope that it would give them hope just to keep moving and keep saying you know what, I got this, I can get through it. And by putting it away for taxes, like, you know, Tony wants some, I don’t know, I don’t know what all these electronic things are. I’m like, no, we’re not gonna do that. He’s really good. I don’t want to sound like he’s not but to have discipline. Because you know, you read about people who ended up taking those PTT loans illegally and buying Ferraris with it. Well, guess what you got caught? So saying, okay, the priority is taxes. But how can we do this in some small way? So I encourage you if you’re able to add a line in your budget for charity. So how do you create an emergency savings, I’m going to suggest that you want something easily accessible. Now for those people listening and watching that are smarter than me when it comes to finances, you might want to invest it, I don’t know how money market accounts, those might be the ones that you can invest and can easily take out. I know if you take out of retirement before I believe 59 and a half, you get penalized? Again, I don’t know the nitty gritty of all that. The bottom line is you need to be able to reach it when you need it. It’s not going to do you any good. If your credit card bill comes around and you can access your emergency savings. So I would suggest in my limited knowledge and again every time you listen to podcasts, take what I have, take what works do your own investigation. Do your own thinking hire your own expert. Try to find as high of a yield is yield savings account as possible. All right now that’s not much. I mean, it’s as if I’m remembering correctly savings, the percentage of your savings account has just it continues to go down or stay very stagnant. So you can easily access it and add it to your budget line items. And why don’t make it easy. If you can have it drafted each year, if you have, I’m sorry, each paycheck. So if you have a checking account, you do a separate emergency savings account and you automatically withdraw it. So you can’t even touch it. Right? If it’s if it’s not there, you can’t spend it. And that will help decrease your temptation, because it’s easier if you can withdraw cash from the ATM. But if more if you have to go online and transfer funds, and set yourself up for success, and then challenge yourself, see if you can increase it a little bit. Maybe you start out for a couple months, and you’re like, I can do this and maybe five bucks, increase it the next six months for five bucks, challenge yourself to keep increasing it. Other ways to add to your emergency fund and you’re really willing to go all in, get a side gig, like driving for Uber.
Or if that’s not your thing, you could do some babysitting, you could do some pet sitting. Trust me having reliable people to sit your sit for your pets and I’m sure your children is sometimes hard to find it if you’re not using things sell stuff, I did a episode I think back in September on how to sell stuff online. Just because we’ve got you know stuff going on, doesn’t mean you can have to stop selling, maybe you are handy and you could do some handyman work selling things, get those side gigs going maybe if you have a little more money, you could buy a rental income, and then you you know, you charge your rent to pay for your taxes and you have a little slush fund if something needs to get fixed, you pay the mortgage, and then you have a monthly income coming from your rental. So get creative with this in what ways could you earn some cash and then maybe that’s everything you do for that you put towards your emergency fund. Now I can’t I don’t sell stuff very well and I know people that I’m not a fan of the multi level marketing thing but there are some people out there that can be really successful they do it nights and weekends and that might fit your life better. So you know think about we can do cutting expenses. So we’re gonna have a side gig and then we’re going to try to see where we can cut expenses. So go through your budget if you have one I mentioned earlier I have that no spend days that I did from last January and that’s gonna have some good suggestion. Food i think is a really good place to start. I am amazed at the differences when I grocery shop the we had a leader which I love, but we’re not near that we had that North Raleigh, but I can drive to an Aldi and when I moved back to West Virginia, to there’s an Aldi there the difference between all the and other grocery stores is amazing. And you know I’m trying to read labels more I’m trying to do fresh food and foods more but because all the Lido from Germany I’m Trader Joe’s is like read your labels, a lot of times they have much more strict requirements now if they’re doing the US are probably no requirements, but they tend and they can be healthier. So I think that there is this myth, misconception that you know, there’s a poor person’s quote unquote, grocery store, whereas you know, in some cases, you might be getting a higher quality but grocery like or, you know, if you keep doing multiple trips to the grocery store, one thing that we switched for this year, we weren’t close to the Costco we’re in. And that’ll be up this month. And we did BJs and I was back in November. I’m like, you know what our membership has expired, we didn’t know we just don’t need this. We if we get stuff we eat it, we don’t eat, we tend to get junk when we’re there. And I can go to all the guests less quantities. And so that was one of the things you know, wasn’t a lot with the membership. But I’m like, every time we go there, like we spent 150 200 bucks I’m like, so let’s cut that out. So that was the place for a minute. So see your food. Shopping might be an area to start. Make sure you’re getting the best deal on insurance. People are can be competitive, call around ask for referrals. If it saves you a couple hundred bucks every six months, I said to Tony call USA you’re working from home now that should help lower our auto bill. Another really good because I think that they because of everything last year, they said oh, you know we’ve applied it to your next six months. We gave everyone a break because we know it’s changed for a lot of people. So if anything’s changed, call your insurance up and see if you can refinance anything. I have to ask someone I know we didn’t refinance the house because they said you have so little on your mortgage with what you’d have to pay for closing it’s not worth it. So when you crunch the numbers decides what’s best for you. But if you have a lot left on your mortgage and mortgage rates, I think will still be really low for this year, but that can save you tons of money and interest. And again, if you’re able to keep paying the same amount and get that paid faster, or you can consider going from a 30 month mortgage to a 15. Sorry, sir 30 year mortgage to a 15 year mortgage, if that may help. Lower your bills. And it’s always worth an ask and we had cable I’d call every year what can you do for me? What kind of deal Are you willing to give me and I always got something, I always got something. And at this point, people are probably going to want to keep your business. So take the time and call and see if you can get money. And remember if that’s a monthly payment you’re doing that adds up over the years you have to remember it’s going to be a bigger savings and just what you get off each month. take actions from today’s podcast and
consider your reasons why you’d like to have an emergency fund and use your reasons to motivate you to save. determine the amount you’d like to have in your savings account. Create a plan to save. Add a line in your budget for disaster money. Look to where you can cut expenses and contemplate ways you can earn extra money and start your emergency fund. Begin saving. On our next episode, we’re talking about what’s in the cards. Go out and clear your clutter to create the life you choose deserve and desire. When you clear your clutter, you can share your gifts with the world. Sign up for our free newsletter at reawaken your brilliance calm. even enjoy clear your clutter inside now. Please rate review and share us
Emergency Fund Transcribed by https://otter.ai