All posts by ECVtalks

Save for the Unexpected

You’ve probably heard it before a million times. You need an emergency fund of 3 to 6 months. Maybe you brushed it off as not urgent or maybe even unimportant. And then the world came to a screeching halt in 2020.

Now here we are in 2022 and maybe you’ve fully adapted to the world post-COVID-19. So what are you doing to be ready to bounce back from the next global event? Did you use that stimulus to start your emergency fund?

It really isn’t a question on whether or not you need an emergency fund.

(You do.) It’s the first line of defense when unexpected expenses show up (and they will—have kids?). Unforeseen emergencies threaten to undo your hard work and careful financial planning.

But what exactly is an emergency fund? What should it look like? And how do you start building one if you don’t have a sack of cash lying around?

What’s an emergency fund… and why do you need one? 

An emergency fund is a dedicated amount of money to cover unplanned, unavoidable expenses. Establishing one is an important milestone on your journey to achieving financial independence! But why is it such a big deal?

Emergencies are a part of life. Nobody schedules a busted transmission or a broken arm, but you’ll need a way to pay for them when they happen. Who would have guessed that a global pandemic would force most of us to stay at home and cost millions of Americans their jobs? So it’s not a question of if you’ll need to cover something unexpected but how you’ll cover it. Without an emergency fund, you’ll be forced to either dip into your long-term savings (assuming you have them) or go into debt. For most people, either option can seriously throw off long-term financial plans. An emergency fund gives you the power to overcome sudden obstacles without sacrificing your retirement or piling up credit card bills.

Emergency fund ins and outs  One critical thing to grasp is that an emergency fund isn’t the same as your savings. Establishing a solid emergency fund is not a long-term goal that’s built over years or decades. Once the emergency fund is full, then you move on to other money milestones like conquering debt and saving for the future.

So how do you know you have enough in your fund? That depends on how much you make. A good rule of thumb is that an emergency fund should cover 3 to 6 months of income. That provides a buffer if you have an unexpected car repair, medical emergency, or if you’re temporarily unemployed due to an unprecedented global pandemic!

But what if you don’t have that much cash just lying around?  3 to 6 months of income might seem like a lot of money to set aside, especially if you’re currently living paycheck to paycheck. Building an emergency fund will take time and budgeting. Start with a goal of saving 2 weeks of pay. Then shoot for 1 month, then 2 months, etc., until you reach your goal.

The 2 Rules of Emergency Funds

Rule 1: An emergency fund is only, ONLY to be used in case of actual emergencies. It’s not for last minute getaways, much needed spa days, or killer video game sales. If those kinds of things come along, you can use a “fun fund”, which of course is part of your regular budget! (We’ll talk more about your “fun fund” in a later post.)

Rule 2: The emergency fund needs to be easily accessible. Make sure it’s in an account where you won’t incur fees for withdrawals when your car breaks down or you suddenly need a new AC unit. That’s why it’s there. Just remember to refill it as soon as the emergency has passed.

Once you’ve built your emergency fund and know the rules, you’re ready to move on to the next stages of building wealth.🎉Congratulations! You’re officially not broke and in the perfect position to chase your financial future!

If you’re ready to start your savings journey but not sure where to begin, check out these 7 Steps to Start Your Savings Journey from AmericaSaves.org.

Or if you prefer some help, meet with a financial advisor for a free consultation to figure it out. 

Save Automatically

Saving money on a consistent basis, regardless of the amount, is the true secret to financial victory. The strategy is simple. And thanks to technology, putting it into place can be simple also. So where do you start?

First you figure out what amount is workable FOR YOU, not anyone else. Then you take all the monthly cash flow that YOU can spare and start saving it into an account with the best interest rate, growth potential, tax advantages, and principal protection you can find AUTOMATICALLY, be it monthly, weekly or daily. Finding the best account is where a financial professional is key. Don’t go it alone.

These habits have created more millionaires than any other story, company buyout, or stock market windfall in the history of the world. The 8th wonder of the world—the power of compound interest—is the magic dust that will always work in your favor if you’ll put it to work.

Saving money is more about the decision than anything else. Just like breaking the cycle of foolish spending, you must DECIDE to save money on a consistent basis. When you do, over the years and decades, you will win because you’re employing the Time Value of Money and the Power of Compound Interest. This is the one-two combo that millionaires use to reach their status.

There are many culprits that can hamper your ability to build wealth.

Believe it or not, your checking account might be one of them.

A checking account is designed to give you quick, flexible access to your money—not grow it efficiently. That’s why the interest rate for an average checking account is negligible—less than .05%.¹ It might as well be zero if you’re considering it as a savings tool for the future.

But you may already be thinking, “no one would consider their checking account a savings vehicle.” Then why do Americans have so much of their money stashed in them—$2.2 trillion in 600 million checking accounts, to be precise. ²

The answer can only be that they don’t know how money works. Otherwise, they would have moved their cash to an account that leverages the power of compound interest with a higher interest rate long ago.

The sucker likes seeing a big balance in their checking account. The wealthy like seeing big deposits moved into their wealth building vehicles.

Do you have too much money sitting in your checking account?

As a rule of thumb, only keep enough cash in your checking account to cover everyday expenses like utility bills and groceries. Move what’s leftover into accounts and vehicles where it can accrue interest at a faster rate. And consider scheduling a conversation with a licensed and qualified financial professional to discuss which saving vehicles are best for you!


¹ “Average Bank Interest Rates in 2021: Checking, Savings, Money Market, and CD Rates,” Chris Moon, ValuePenguin, Dec 11, 2021, https://www.valuepenguin.com/banking/average-bank-interest-rates#

² “Checking Accounts Shrink by Nearly 100 Million Accounts Since 2011,” Tina Orem, Credit Union Times, May 8, 2018, https://www.cutimes.com/2018/05/08/checking-accounts-shrink-by-nearly-100-million-acc/#

Is A Travel Cruise Franchise Opportunity For You?

If your entrepreneurial mind is combined with a love of travel, you may want to consider a travel franchise. Cruise franchises can be particularly lucrative as evidenced by these data: Last year, the Cruise Lines International Association (CLIA) reported that the North American cruise industry grossed $35.7 billion, and global industry revenues were $20.6 billionóa […]

Is A Travel Cruise Franchise Opportunity For You?

You’re All Invited!

You’ve been following the blog for a while now, some of you since we moved to this platform back in 2013. You’ve see how our focus on overall wellness has from the beginning included being able to enjoy what you do for a living. So do any of these comments from people we’ve interviewed sound like something you’ve said?

  • “I love what I do but I hate the work environment. I wish I could change things/was running things.”
  • “I don’t have the money 💰 or the time ⏳ to start my own business.”
  • “I’m afraid of failing if I start my own business. What if no one supports me?” 😨
Photo by Andrea Piacquadio on Pexels.com

We’re hosting a LIVE masterclass this Sunday, January 9th where we’re going to address each of these perceived obstacles to entrepreneurship and help you create a plan to overcome them. Interested?

The objective of the class?
      + Teach you what you need to have to smoothly transition from employee to Entrepreneur.

Here’s what you’ll learn:
     + What everyone needs to know when deciding whether to become a business owner
     + What it takes to maintain the entrepreneur lifestyle
     + What should be part of your plan E (no, I’m not talking about a business plan)

Why are we doing a Masterclass?
     + Because classes change lives. Seriously.

Our blog posts, videos and social media feeds provide INFORMATION only. But here at ECV Talks we know that EXECUTION creates value. And after a decade as an educator, Ms. ME knows how to provide you with that critical support throughout the process of creating & executing your Plan ‘E’.

Join her on this FREE Masterclass, and see what being an entrepreneur can look like for you. You’ll also get our Entrepreneur starter pack FREE just for attending!

Now is the time to stop wondering, stop wishing and go ahead and take the leap. Level up that side hustle or start that dream business!

Wishing you wellness!

HOW HABITS WORK

Hitting the snooze button.Brewing coffee first thing in the morning. Working out right after you leave the office.

Our lives are full of actions that we’re almost unaware of. Many of them just help us get little things done more efficiently. But some habits can have a huge impact on our lives in either a positive or negative way. Here’s a quick breakdown of how habits work and ways to “trick yourself” into better behavior patterns.

Why habits?
The brain likes habits because it craves efficiency. It looks for the path of least resistance when it comes to using energy. Making decisions takes a lot of brain power. Too many choices in a day can leave you feeling mentally exhausted, so your brain looks for ways to cut corners. It starts automating little decisions that you make repeatedly. Brushing your teeth, tying your shoes, and checking your social media are choices you’ve made so often that your brain stops consciously weighing in and seems to just spontaneously make you do them.

So that’s why your brain likes forming habits. But the mechanics of how a habit forms is essential if you’re trying to upgrade your unconscious behaviors!

Cues, Routines, and Rewards
A habit can be broken down into three basic components. It starts with a cue. That’s any kind of trigger that makes you want to do something. Actually performing the action suggested by the cue is called a routine. Following the routine usually results in some kind of reward, either physical or psychological.

So let’s say you’ve developed a habit of eating a cookie with your morning coffee. You wake up, put on the pot, and brew a delicious cup of joe. You instantly start craving the cookie when you smell that medium roast goodness. That’s the cue. You reach into the jar, grab the biggest chocolate chip cookie you can get your hands on, and take a bite. That’s the routine. And the tingling joy and comfort you feel when that life-giving treat hits your tongue? That’s the reward that brings you back morning after morning. But the consequence might be that you’ve put on a few unwanted pounds in the last couple of months.

How to use the habit pattern
It’s easy to see how certain habits can lead to some undesirable outcomes. We tend to form habits around anything that rewards our brains, whether it’s junk food, caffeine, or dangerous substances. But our brains also like things such as observing progress and accomplishing goals.

How can we use this to encourage good habits? Here are a few ideas:

Start really small: Break your desired habit down into pieces and try to regularly perform each one. You might be surprised by how good it feels to accomplish something, which can prompt you to make more and more progress.

Reward yourself: Some activities are very rewarding in the moment. But not everything that’s good for you leaves you feeling accomplished right away. Try something like only playing video games after 30 minutes of reading!

Be patient: Habits don’t form overnight. You’ll probably mess up before it sticks. Don’t sweat the little failures and keep trying until that habit becomes second nature!