Momma Said There’d Be Days Like This…

Welp, here we sit at that start of a new year. It’s 2019 y’all and no sooner than the hangover from New Years eve celebrations wears off we are facing a whole new set of challenges. The government shut down is in effect and 400,000 people are about to have to make ends meet without the benefit of a paycheck. These are people with “them good jobs”. The good government jobs that our parents told us to study hard, so that we could work twice as hard to qualify to get and keep, these jobs are sending people suggestions on how to negotiate with bill collectors instead of their hard-earned money. Right after you bought Christmas a sweater for your snaggle tooth uncle that you don’t hardly ever see or even like too much! On top of that, there is a decent chance that IRS refund checks won’t be coming nearly as quickly as folk expected (they still are going to take the money OUT of your check though). All of this is a recipe for cash flow disasters and the payday loan stores are waiting in the wings and licking their chops. This is the type of desperation that high interest lenders love to see. If you didn’t make the resolution to get your financial house in order on the 1st of the year, today seems like a good day to make a commitment and get the ball rolling. The 1st step? Glad you asked, is to start a short-term cash reserve.

Now I know that saving is close to impossible for the folk who haven’t done so yet and are about to miss a paycheck so I’m not talking to you if that’s your situation. But you still need to pay attention so that when you finally do start getting paid again, you can make provision for the next time the government decides to act a fool, and I’m certain they will. A short-term cash reserve is your own personal insurance policy. You set this up by stashing some of your hard-earned cash every single time you get paid. Every time?… Yup, every stinking time! Now much like any affordable policy, your short-term cash reserve requires a small premium that will come out of each paycheck. A lot of folks will say you need to be putting at least 10% of your salary away and I don’t think that’s a bad goal. I say, just get started. It can be as a little as $10 per check and I’m fine with that. Hey, a journey of a thousand miles begins with just one step. But if you don’t take a step you will never get started and eventually you might get STEPPED ON! There are savings accounts that you can start at the same bank where you have your checking account. They might not pay high interest but remember, this is about stashing money for the rough times, we will get to the higher return stuff as we build up money over time. You can set a date for each money transfer like the 1st and 15th if that’s when you get paid. The money comes out of your checking account, the same day it goes in and that can be a big help if you are like me and find it easy to spend any available cash. I always seem to find “needs” even when they don’t exist if I have that cash burning a hole in my pocket. The key here is to automate that savings and pay yourself first.

Once you get the process started, it’s a lot like exercise and you start to develop saving as a habit. I think we are all familiar with habits and how persistent they can be, especially the bad habits. You ever see someone smoking outside a building in Chicago, in the winter time, with the wind blowing all hard. Shoulders all hunched, and face screwed up, with fingers shaking while their lips are struggling to curl around a ‘square’. To the uninitiated they look crazy as hell, but those who have experience with that habit understand how powerful repetition can be. They started with one cigarette a looong time ago and look at them now! Good habits like saving work in a similar fashion. You start with one workout, you break a sweat, but you don’t kill yourself trying to turn into Idris Elba overnight. You do a little bit every other day and you get stronger over an extended period of time. As you get stronger, you can workout harder and see even better results. Eventually other people start seeing your results and telling you that you are starting to look good and ask what you’ve been doing. You’re like “Not a whole lot, just started taking care of myself and doing a lil workout every morning. You see it?” Then they’re like “Yeah I see it, you looking good. I wish I had the will power to be like you.” Then you be like, “ Ain’t nothing all that special about what I did, you can do it too.” This all continues until you lose “enough” weight and people tell you don’t lose another pound because your head starting to look too big for your body and lil Luther couldn’t sing as good as Big Luther. I guess my point here is that you can build from a very small action and get to a place that others would admire and then eventually try to hate on. I think deep down, that’s what we’re all searching for. But, first things first, talk to that relationship banker at your local bank branch, or set the account up online if you don’t want to brave the elements, and get the ball rolling. Your financially independent future self is waiting on your current self to take the first step.

Talk to you soon,
Dr. Loving
Ps- Always remember that people are more important than things.