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  • Writer's picturefabmolly

What is an “oh crap!” fund and why we need one



Hello Fabulous Followers!

I saw this little snippet in the Denver Post yesterday, and I thought it worthy of a blog post. It basically says that “the emergency fund is a bust.” Why, because most of us have what they term “misplaced optimism.” We tend to think that if we are healthy that we will remain healthy, or if the car runs then it won’t break down. Unfortunately, this just is not true. When things do go wrong, often Americans end up taking out loans or charging expenses to our credit card which leads to long-term debt.


By establishing a dedicated “oh crap!” fund the idea is that you have a little “slush fund” for those not quite emergency situations. This is separate from your retirement savings account. You don’t want to delve into that until you are well, retired. This is an account for life’s unexpected expenses, the no-parking sign they didn’t see, the crown the dentist says they need or the smartphone dropped in the toilet. This is not your “fun” fund either. You should be saving separately for vacations, plastic surgery, and other leisurely expenditures. The “oh crap!” fund is for life’s inevitable surprise expenses. The stuff that people usually end up putting on their credit card because they NEED it, but don’t really have the money to AFFORD it. “The power of just a few hundred dollars of savings can really help reduce the use of high-cost lending,” says John Thompson, chief program officer for the Center for Financial Services Innovation. It doesn’t have to be huge, and it should be spent not hoarded. Think of it as a transactional fund that will continue being spent than saved and then spent again. Saving in your “oh crap!” fund builds your saving muscle. Be it our “retirement” fund, our “fun” fund, or our every day “savings” fund, putting away just a little bit each month can save you from the expenses and stress of carrying debt. Even saving just $20-50.00 a month would be fabulous. Then when the “oh crap” expense arise you are not having to resort to expensive credit card debt or payday loans.


To read the whole article you can click here: https://apnews.com/7e81bbe69b6a4eb8ab959b7b5ed8cb4a

If you are saying to yourself “heck, I don’t even have a savings account,” then reach out to me. You NEED to be saving money!!! If you are not making enough through your job to save, then you should consider a “side hustle.” A part time job that you can fit into the cracks of your day to help you earn more money. I have the perfect opportunity for that. An online business that can be run from your phone that will pay you long-term residual income. It’s totally FABULOUS! I would love to tell you more so email me at m@rud.co if you want to learn more.


In the meantime though, just do it! Start by logging into your bank website this very minute and setting up an account called “oh crap!” In fact, you can get a little more colorful in naming it too. While you are in there you might want to create a separate account for something else you want to have in the next month, year, or decade. Ideally, when you buy something you are using money that you have, not money that you borrow, and the only way to do that is to SAVE.

As I’m typing this I am reprimanding myself as well. I am just as guilty as the next guy. That said, I’ll be wrapping this article up and logging into my bank website to implement my own advice. All of this will make us more fabulous and debt-free than ever!!!

Stay financially fabulous everyone❣️🙌🏼🤑

FabMolly

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