This week ended June and started out July–crazy to think we are over halfway through this epically long year! June ended with Gail talking about widowhood, death and injury, and getting one’s estate in order. July started out with a reminded to make a monthly donation to the food bank or women’s shelter. The topic to start out July is the risks of life and the need for FU accounts (aka emergency funds).
Gail started out this week with a topic that most people want to avoid–the realities behind becoming a widow.
The Risks of Life
While this is related to the previous topic, the broader scope is that life is unpredictable for any and everyone. The need for a will and communicating these details with your loved ones is something for people of all ages and status to look at.
FU Accounts aka Emergency Funds
This week we received our first task in a long time! The task for this week is to figure out what our essential expenses are so that we know how much money to put in our emergency fund.
The steps to figuring out essential expenses:
1. Go through your expenses and separate them into “must-haves” and “nice-to-haves”
2. Go through your “must-haves” and separate out the bare minimum you need to spend.
In summary, an emergency fund:
- is money you have set aside for when life turns upside down and sideways
- is money that is liquid and instantly accessible when you need it–either a TFSA or a HISA (high interest savings account)
- is NOT a line of credit or any form of debt. It is money that will keep you out of debt when “crap hits the fan”
- is 6-months worth of essential expenses–these are the bare minimum must-haves in your budget
- is something smart people have
An emergency fund is for these big, unexpected occurrences: job loss, serious illness, and death. Unexpected expenses such as a car breaking down (which was me this week!) should not be covered by an emergency fund, but by one of two places. Ideally, we’d all have enough saved up in a vehicle maintenance fund, but the other option is the curve-ball account that Gail had us setting up earlier this year. She talked about the curve-ball account back in Week 14, which you can read here.
Which of these big topics this week resonated with you?
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