Are you living on a knife edge ? Am I living on a knife edge ?
A recent Yougov survey in the UK which sampled 7,500 families revealed that 44% of families only have enough savings to pay for one months rent or mortgage if they were to lose their jobs.
29% of families would not be able to pay their immediate months rent or mortgage if they were to lose their jobs.
Thats Scary !
Examining my own position, I would just about be able to manage as my wife earns a decent income, but if we were both to lose our jobs then we would be in serious doo doo
At the beginning of my process of paying off my debts and climbing out of a financial hole I saved up £1,000 to act as an emergency fund. This was to act as a buffer between my income and outgoings, to cover me if I ran short one month, and to stop me from falling back on my credit cards if times got tough.
Last month – times got tough, and I burnt through my £1,000 and some more – which sadly hit the plastic to the tune of £450 (ouch)
I know feel so dumb.
Even though I’ve got a good couple of months coming up, I now have to make up my £1,000 buffer and repay the £450 to the plastic.
So the answer to the question I posed above
Am I living on a knife edge ?
then the answer has to be a most definite YES
Over the coming weeks once I’ve repaid the cards and the £1,000 into my emergency fund I need to start building up my emergency fund to something more meaningful.
In the past, I would have no problem with just hitting the plastic, and then not bothering to repay the balance, just ticking off the increased minimum repayment each month.
Nowadays the new “improved” me has begun to develop a dread of plastic and I’ve got no intention of falling back into the old habits which have landed me in this mess in the first place
Being self employed has great benefits to my life. However – the MAJOR downside is the lack of income stability.
I think the only way to get rid of this downside is to build up a higher cash reserve in my business accounts so that i can pay myself more consistently and to increase my personal cash emergency fund to at least £3,000
Now that the balances on my credit cards are consistently falling, my credit limits are being increased – in some cases by nearly 100%. I’ve now got capacity to borrow a further £10k on the plastic if things get really bad, but that would be like taking one step forwards and then 100 steps back.
I aint going there !
Are you living on a knife edge with regards to your lack of savings ?
If your honest answer to this is yes, then its time to consider taking steps to re-organise your finances, write a spending plan and start to save for the future.