How long could you survive if you lost your job?


A recent article on the Stuff website reads “Twenty-five per cent of Kiwis would not make it to the end of month if their main source of income dried up, a survey shows.”

As one of the commenters has pointed out, the article is a little ambiguous.  Published on the 25th of July, there were only 6 days until the end of the month.  Is the article trying to say that 25% of people couldn’t survive 6 days without income?  Surely not!  Although, perhaps a whole month without income would be more challenging.

How would you cope?

Today’s post is to remind you that you have a crisis if you do not have access to rainy day funds.

Mr Money Mustache states that this is an emergency and to be taken very seriously.  He would go as far as to say that you are to have no luxuries at all until you have enough of a “stash” to support yourself in funding a $1000 unexpected bill, or perhaps a month without income.

Many financial writers state that you should have enough put aside to cover three months of expenses, before you spend any money on anything else.

Robert Kiyosaki calls a job a “Just Over Broke” because you are totally reliant on exchanging your hours of life for a wage.  What happens when you can’t do that anymore, or your job becomes redundant?

If you are struggling to put aside anything at all to grow your wealth, provide for you in your old age, or to invest for your future, then you need to change your current financial habits.

Whilst some people are on very low incomes, many people on the average wage are wasting a lot of money on things that don’t create meaning in their lives.  Most people increase their spending habits to consume any extra income they may generate.  Have you noticed that people continue to “upgrade” their houses and cars, or their smart phone?  What was wrong with the previous model?  It must have been suitable for you at the time you purchased it, has your situation changed that much that you suddenly need a newer model?  Sometimes, maybe, but generally, NO!

If you are guilty of mindless spending and don’t currently have access to enough money to support yourself for at least a month, you need to commit to not buying anything new until you have a rainy day fund.

Just Over Broke’s are not secure.  Any of us could be out of work at any time.  If you are currently struggling to live on what you are earning, how are you going to live on less – or nothing at all?

This post is supposed to frighten you and wake you up to the fact that you are the only one who can protect yourself financially.

If, on the other hand, you do have a little stashed away, perhaps you should look at growing this fund enough that it will generate some income to replace your J.O.B.  If you can pull this off, then you’ll be financially-free, and able to retire.

 

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