Building An Emergency Fund

Emergency Funds: Not If, But When You'll Need Them…. Think of your emergency fund as your financial life jacket. It’s there to keep you afloat when the waters get rough—not just a nice to have, but a total must. This isn’t just any pool of money. It’s your safety net, your peace of mind. Here’s why you need it: 🌊 Life's Surprises: → Job surprises, unexpected bills, or sudden repairs? → This fund keeps those from knocking your life off course. 🌊 How Much?: → Aim to stash away at least 3-6 months of your living costs. → We’re talking rent, groceries, bills—all the essentials to get you through without a paycheck. 🌊 Where to Park It: → Keep it accessible but growing. → Think high-yield savings accounts where you can grab it without a penalty but still earn a bit on the side. 🌊 Starting Out: → Begin small if that’s what works. → Set up a little auto-transfer from each paycheck—trust me, it adds up. 🌊 Keep It Updated: → Life changes, so should your fund. Got a raise? Maybe you moved? → Check in on your fund yearly to make sure it still fits your life. It’s not about if you'll need it—more like when. And when that time comes, you’ll pat yourself on the back for being so prepared. Got questions on starting yours or how much you should save? Drop them below. 👇

  Why now is not the time to quit your job without a solid plan.   While the headlines aren't officially declaring a recession, the job market is showing concerning signs of a significant slowdown that feels eerily reminiscent of 2008.   I'm seeing patterns that should give everyone pause: • Companies abruptly freezing hiring budgets mid-process • Candidates completing multiple rounds of interviews only to be ghosted • Hiring timelines stretching from weeks to months with little explanation • Job offers being rescinded at the last minute due to "changing business conditions"   These aren't isolated incidents - they're becoming increasingly common across industries.   This doesn't mean you should never change jobs, but it does mean approaching transitions with far more caution than in recent years.   The professionals weathering economic uncertainty most successfully are taking strategic steps: 1. Building financial runway: Aggressively increase emergency savings to cover 6+ months of expenses before making any voluntary job changes. 2. Focusing on recession-resistant roles: Certain functions remain essential even during downturns. Understanding which roles in your industry have staying power is crucial. 3. Strengthening skills with demonstrable ROI: Identify and develop capabilities that directly contribute to cost savings or revenue generation - these remain valuable in any economy. 4. Quietly nurturing professional networks: Build relationships before you need them, focusing on connections in stable sectors. 5. Documenting achievements meticulously: Create detailed records of your contributions, particularly those that demonstrate efficiency or cost-effectiveness.   The best time to prepare for economic turbulence is before everyone realizes it's happening.   What steps are you taking to ensure your career resilience in uncertain times?   Check out my newsletter for more insights here: https://lnkd.in/ei_uQjju   #executiverecruiter #eliterecruiter #jobmarket2025 #profoliosai #resume #jobstrategy #economicuncertainty #careerplanning #jobmarketsigns #recessionpreparation

Starting your emergency savings fund might seem daunting, but with a clear plan and commitment, you can make it happen. Let’s break it down step by step, starting with a goal of saving 3-months of living costs. 🟣Step 1. The first step in committing to building up a 3-month savings account is to have a clear picture of your monthly essential costs. No guessing. Or ballparking. Please find some quiet time to tally up not just the rent/mortgage, but the food and utilities. And calculate the monthly cost of all your essential insurance premiums: health, home/renters, car.   🟣Step 2. Then multiply that by 3. That’s your savings goal.   🟣Step 3. Next, divide that sum by 12. For instance, if three months of living costs is $7,500, you would need to save $625 a month to have your 3-month emergency savings within one year. If that’s too steep a commitment, divide by 18 to see what you would need to save to meet your goal within a year and a half. Still too steep? No worries! Divided by 24; do you think you could save that sum to reach your goal within two years? For our $7,500 example, that would be $310.50 a month. Which is about $10 a day. I bet that’s not out of the question if you make it a priority, right? Get started today and set yourself on the path to financial security! #EmergencySavings #FinancialSecurity #MoneyManagement #SavingsGoals

A nonprofit's bank account hit zero on payroll day. The board kept saying "we'll build reserves later.” Later became never. Here's what I wish they'd known. Many nonprofit boards view reserves as a luxury - something to build after other priorities are met. This mindset puts your organization at risk. Nonprofit Finance Fund shows that 76% of nonprofits have less than 6 months of operating reserves, leaving them vulnerable to disruption. Why Reserves Matter Now More Than Ever Your nonprofit faces increasing volatility: -Government funding delays stretching 90+ days -Natural disasters disrupting operations -Economic downturns impacting donor giving -Unexpected facility repairs or equipment failures -Staff turnover requiring temporary staffing Without adequate reserves, any of these challenges can force impossible choices between serving your mission and meeting basic obligations. Here's what your board needs to understand. Reserves aren't idle money - they're strategic risk management. Just as you wouldn't operate without insurance, you shouldn't operate without financial protection. Walk through specific situations your nonprofit could face: - A key grant payment delayed by 60 days - Emergency building repairs needed to maintain programs - Bridge funding needed during leadership transition - Operating funds required during disaster recovery Every strong reserve started with a first step. Your mission deserves this protection - help your board understand why.

You get a new nicer apartment… but your hours get reduced. You move across the country for a new job… and get laid off weeks later. You get into an accident… and your health insurance only covers a fraction of what you need. These are the kinds of financial emergencies that plague our collective nightmares. While you can’t always fully weather-proof your finances, there are some steps you can take to make the bumpy rides a little smoother. 1) Increase your emergency fund. The first step of any financial plan is to get 3-6 months of living expenses into a high-yield savings account (HYSA). But maybe you’re worried about how long it can take to get a new job or you’re considering a move–having extra savings can help put your mind at ease. Especially if you have a family or others who depend on you financially, you might want to increase your emergency fund. 2) Move your emergency fund into a HYSA if you haven’t already to get that extra interest rate boost. I've got the one I recommend on my website's Money Tools page. 3) Keep your set expenses low. This is something that can be hard to change in the moment, but a great way you can prepare when things are going well. If you’re thinking, I wish I could!, I get it. Here are some things to keep in mind: Avoid subscriptions and recurring costs. Give extra consideration to expenses that you can’t easily change (like car payments and apartment leases).  Know the terms of cancellation and any penalties before purchasing. 4) Make your ramen budget. This is your budget based on the absolute minimum you can spend. I made one when I was going full-time with HFK to help deal with the anxiety of becoming an entrepreneur. You might even do a few versions at different levels. Here are some questions to ask yourself: What could I cut immediately? What could I cut with some leeway? How could I make some extra cash? Sometimes there are practical things you can do now to make things easier later. Sometimes going through the thought process of “what would this be like?” can help you work through your money anxiety. And sometimes things are just tough and there’s nothing you could have done to prevent them. I’m not going to tell you that you should just pull yourself up by your bootstraps. But I am here to tell you that while there’s only so much you can do, you can do those things and adjust your money plan. Just take it one day at a time.

Most founders think they have an emergency fund. Until they actually need one. They set aside a vague amount that feels right. But when the revenue dips, it barely lasts a month. I’ve seen it happen way too many times. That’s why I built my emergency fund with intention and not emotion. Here’s how I did it (and helped my clients do the same, too)- 1. Calculate your 3-month burn rate.  ⤷ This includes salaries, rent, tools taxes. That’s your base. 2. Add an extra buffer for “business hiccups.” ⤷ A slow quarter, late payments, or a surprise compliance bill. Expect the unexpected. 3. Automate 5-10% of monthly revenue into a separate account ⤷ No thinking. No skipping. Treat it like a non-negotiable expense. 4. Revisit it every quarter ⤷ As your business grows, so should your safety net. When you have a safety net, you stop making desperate decisions. You start making better ones.

𝗖𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗮 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗦𝗮𝗳𝗲𝘁𝘆 𝗡𝗲𝘁: 𝗣𝗿𝗼𝘁𝗲𝗰𝘁 𝗬𝗼𝘂𝗿𝘀𝗲𝗹𝗳 𝗳𝗿𝗼𝗺 𝗟𝗶𝗳𝗲’𝘀 𝗨𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝘁𝗶𝗲𝘀 💰 How can I create a financial safety net to protect myself from life’s uncertainties? You’re not alone if the thought of an unexpected expense brings you worry. Many people feel unprepared to face sudden financial burdens, especially in today’s economic climate. It’s common to feel overwhelmed or unsure about where to start with saving for emergencies. You deserve to feel secure and protected against the uncertainties of life. 🛡️ Without a financial safety net, you’re at risk of falling into debt or struggling to meet essential needs when unexpected expenses arise. This lack of preparation can lead to borrowing at high interest rates, relying on credit cards, or postponing important payments—all of which can lead to long-term financial stress and setbacks. By not addressing this gap, you’re exposing yourself to greater financial vulnerability and uncertainty. 🤔 The Solution: 🔰 Assess Your Current Budget: Identify any areas where you can cut back on non-essential spending. Redirect these funds to build an emergency fund. 🔰 Set a Realistic Savings Goal: Aim to save at least three to six months’ worth of essential expenses. Start small, and build up gradually if needed. 🔰 Automate Savings: Set up automatic transfers to a separate emergency savings account each month. This makes saving easier and consistent. 🔰 Build Gradually with Small Goals: Start with saving for one month’s expenses, then two, and so on. Reaching smaller milestones can be motivating. 🔰 Consider Additional Income Sources: If possible, take on a side gig or freelance work temporarily to help boost your savings more quickly. By taking these steps to build a financial safety net, you’ll feel more secure and prepared for life’s unexpected events. With an emergency fund in place, you’ll have the peace of mind that comes with knowing you can cover unexpected costs without jeopardizing your financial stability. Following these steps not only reduces stress but also empowers you to make sound financial decisions even in challenging times. 💪 What other benefits have you found when creating a positive relationship with money? 💰 #TaxStrategy #MaximizeSavings #smallbusinessowners #yourvaluedcpa #entrepreneur

The recent fires in LA and the surrounding area got me to thinking more about personal financial planning like a CFO - Financial Planning for Natural Disasters Natural disasters—whether wildfires in LA, hurricanes, floods, or earthquakes—remind us how unpredictable life can be. In business, planning for worst-case scenarios is a cornerstone of financial strategy. It should also be a cornerstone of personal financial planning. Here’s how you can apply CFO-level thinking to protect yourself and your family when the unexpected strikes: 1️⃣ Start with the Worst-Case Scenario In business, we ask: “What’s the absolute worst that could happen?” Then we plan backwards. Apply the same approach:  - Imagine the worst: Complete loss of your home, extended evacuation, temporary unemployment, or medical emergencies.  - Assess the financial impact: Costs for temporary housing, replacing possessions, and covering expenses without income.  - Prepare accordingly: Build a disaster fund specifically for worst-case events. This goes beyond a standard emergency fund—it’s money you may need fast. 2️⃣ Build a Financial Safety Net Just as companies maintain cash reserves for downturns, you need liquid savings to cover immediate needs. A good starting point is 6–12 months of living expenses. If you’re in a high-risk area, consider aiming for more. Don’t forget insurance: - Review your homeowners’ or renters’ insurance for coverage gaps.  - Add disaster-specific policies like flood or earthquake insurance if needed.  - Ensure your policy includes temporary living expenses if you’re displaced. 3️⃣ Create an Emergency Plan Financial preparedness goes hand-in-hand with physical preparedness:  - Access to cash: Keep a portion of your emergency fund in a high-yield savings account and some in cash for quick access.  - Digital backups: Store critical documents—insurance, IDs, bank info—securely in the cloud for easy retrieval.  - Budget for essentials: Make a post-disaster budget prioritizing food, shelter, and transportation. 4️⃣ Regularly Stress-Test Your Plan In business, we stress-test forecasts to see if our plans hold up under extreme conditions. Do the same with your personal finances:  - Ask yourself: “What if I lost my home tomorrow? Do I have enough to cover temporary housing and replacement costs?”  - Adjust your savings and coverage annually to keep pace with inflation and changing risks. 5️⃣ Prepare for Recovery, Not Just Survival  The aftermath of a disaster can be just as challenging as the event itself. Plan for:  - Long-term rebuilding costs.  - Legal or insurance claims processes.  - Temporary loss of income if you can’t work. Think about your financial resilience in phases: immediate survival, short-term stability, and long-term recovery. Planning for the worst isn’t about being pessimistic—it’s about being prepared. #FinancialPlanning #DisasterPreparedness #Resilience #CFOperspective 

Three Financial Pitfalls to Be Aware of as a 1099 Worker 1. Not planning for the future/saving for retirement. When you’re not a W-2 employee, it takes some extra effort to be consistent with retirement saving. General guideline is to try to sock away 10-20% of your income for retirement. Each time you get paid, plan to put a portion of it into retirement savings. 2. Not planning for taxes: Taxes can be a big landmine for 1099 workers if they aren’t planning for them. When you’re self-employed, you’re responsible for not only state and Federal taxes, but also the combined employee and employer amount for Social Security tax. Suggested strategy – each time you get paid, set aside 30% in a separate savings account earmarked for taxes. Use that pot to pay estimated taxes throughout the year (if needed) and to be ready to tackle any tax bills when you file. It’s a good idea to work with an accountant to make sure you’re looking at the whole tax picture. 3. Managing “lumpy” income: When your income fluctuates, it’s easy to find yourself in “feast or famine” mode. It can be easy to overspend when you’re flush and be really stressful when business is slow. Having an emergency reserve is KEY! It’s good to have at least 3-12 months’ worth of spending needs as a cash cushion to help get you through the slow months. (bonus tip – use a high interest savings account so it’s earning a little interest). #1099workers #selfemployed #retirementsavings #gigworkers CGN Advisors, LLC

Your emergency fund probably isn't big enough. There, I said it. Most financial "experts" are still pushing the same outdated advice: "Save 3-6 months of expenses and you're good to go!" This could be dangerous for most business owners and high-earners today. → If you're bringing in variable income → If you're self-employed → If you have people depending on your earnings The standard 3-6 month emergency fund is playing with fire. Here's why: When you run your own business or have commission-based income, market downturns and economic factors don't just affect your investments—they hit your actual income. Exactly when you might need cash the most, your ability to generate it could be compromised. I've seen it happen: → The fitness business that had to completely shut down for 4+ months  → The sales professional whose commissions dried up for 3 months None of them anticipated these scenarios. All of them wished their cash reserves were larger. For business owners and variable income earners, this is probably more in line: → 6-12 months of expenses  → Separate business and personal emergency funds → Additional cash reserves for business opportunities This isn't about fear. It's about freedom. A robust emergency fund doesn't just protect you—it empowers you to take strategic risks, seize opportunities, and sleep soundly regardless of market conditions. Will this approach mean slower investing in the beginning? Maybe. Will you thank yourself when (not if) the unexpected happens? Absolutely. I'd rather see a fully funded emergency fund before focusing on growth.