Page 34 - ICE Today May - June 2020

freedom” i.e. when you’re not this stage, just take the minimum this as, creating a retirement fund.
worried about living monthly expenses amount But you can, of course, create
paycheck-to-paycheck; when you calculated earlier and multiply it short term savings as well. The
don’t have to think about money by 3. This would be your first easiest way would be by creating a
before making every decision and goal, save enough to survive for 3 DPS which if taken through
are not adversely affected when months. Once you hit that certain vendors can be bundled
sudden major events happen such number in savings, extend it to 6 with health insurance. A DPS has
as sudden medical expenses or months and then maybe extend it tax benefits as well. There are
even job loss as many have further to 12 months. other alternatives and depending
experienced over the past few Before we tackle the second type on the amount that is available to
months. The way I like to look at of saving, what I would want to save, you could choose different
this is, having enough money to mention is that if you have debts, options but that’s a conversation
be able to say “money is not this is when you should think for another day.
everything!” and as Warren Buffet about attempting to pay those off Finally, this whole process might
so eloquently adds “make sure earlier. The sooner you settle your sound easy on paper but
you make a lot of it before saying debts, the less you’ll pay in practically can be hard to pull off.
such nonsense” interest costs and it will make you Try reading books on personal
The first action plan should feel a lot better mentally. This finance at least once a year to
always be to start saving. I will, includes credit card debt and not reset your priorities as we will
however, take this step a bit just long term loans. Try tackling surely get distracted by shiny
further and say that this “saving” the debt with the highest interest objects. This is a long term goal
needs to be broken down into rate first and slowly move down. that you’re trying to achieve and it
two parts. I would recommend This would result in most savings. won’t be easy, but stick to it. Once
creating an emergency fund i.e. I would also suggest that maybe you have a track of how much
simply setting some money aside it’s time if people owe you money, you’re spending each month, once
in case of a rainy day. And no, start collecting them. I know that you differentiate between
that expensive phone that just there are some of us who find it “necessities”, “nice to haves” and
came out is not an emergency! hard to ask people to pay you “Not needed”, once you create an
Why create one? Because back but trust me, this will save emergency fund, pay off debts,
everything that can go wrong will you from a lot of unwanted stress collect everything that is due to
go wrong! This fund should be at a later stage. It is not selfish, you, have a secondary
kept separate from bank accounts but you’re merely taking care of saving/retirement fund, you will
you usually use and should only yourself and your family. You can safely be on your way towards
be touched in case of actual do this! financial freedom and maybe even
emergencies. The second type of saving should reach the point that you can say
Calculating how much should go ideally be in the form of making “money is not everything”!
to your emergency fund is easy at an investment. I like to think of

28 ICE TODAY MAY-JUNE 2020