April 30, 2025 • 29 mins
Layoffs, inflation, and rising costs are rewriting the rules of emergency savings. In this episode, Jess & Brandon break down why the old "3-month cushion" no longer cuts it—and what you actually need instead.
You’ll learn:
- Why experts now recommend a 12-month emergency fund
- How to separate wants vs. needs when calculating your savings target
- Why investments ≠ emergency savings (and what to do instead)
- 5 practical strategies to build your fund faster—without burnout
- How to turn a daunting goal into doable milestones
Whether you're starting from scratch or leveling up, this episode gives you a clear, no-fluff plan to create real financial security in uncertain times.
Listen now and take the first step toward peace of mind and real financial freedom.
Visit prenups.com/sugardaddy to learn more about fair prenups that help couples plan for a healthy financial relationship.
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Notes from the show:
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:51):
Prices are creeping up again,and if you're already feeling
stretched, this episode is yourwake-up call.
With new tariffs shaking theeconomy, now is the time to
build a serious emergency fund,not someday now.
In this episode we're breakingdown what's really going on with
inflation, why the oldthree-month savings rule won't
cut it anymore, and five smart,doable ways to start stacking
your safety net fast.
(01:11):
Because peace of mind, that isthe ultimate flex.
If you've ever felt behindoverwhelmed or one unexpected
bill away from panic, thisepisode is for you.
Hey, babe, what are we talkingabout today?
Speaker 2 (01:42):
Today, we are talking about our emergency funds and
why we need to get them lookingright yeah.
Speaker 1 (01:48):
Unfortunately, we are in, I would say, somewhat
unprecedented times.
Oh my gosh, every time somebodysays that a unicorn dies.
Speaker 2 (01:54):
But the focus of the episode today is, as you said,
on emergency funds.
I would say that this is one ofthe first steps you should have
when it comes to bettering yourfinancial situation and I would
say most people, this is thestuff they don't have in place
yet.
Speaker 1 (02:11):
Yeah, like what?
One in three Americans can'tcover a $400 emergency.
Speaker 2 (02:16):
I think it's more than that maybe, but something
around there.
Speaker 1 (02:18):
It's, it's sad and emergencies constantly are
happening.
You know, like literallyremember how our parents used to
be like if it's not one thing,it's another yeah, it literally
is always one thing or another Imean it is never ending yeah,
that's adulting, unfortunatelyoh my gosh, I'm so over it.
Speaker 2 (02:36):
It's the worst yeah, and unfortunately, with the way
the economy is working now, ornot working, I would say that it
is actually more important thanever to really focus on making
sure that you have an adequateemergency fund.
Speaker 1 (02:52):
Well, and not to mention, obviously, the cost of
everything is skyrocketing andyou can't get out of the grocery
store for under $100.
And then you walk out and youhave two bags in your hand and
you're like, wait, what did Ijust buy?
And these are just snacks forthe next 48 hours.
I mean that's ridiculous.
But then also just life ingeneral.
I mean the layoffs are.
(03:14):
They just keep coming.
And I mean, if you're payingattention at all, you probably
have somebody in your circlewho's gotten laid off, whether
they're at a big company or theywork in nonprofit.
I mean it's just scary.
Speaker 2 (03:28):
Yeah, and a good portion of our country doesn't
understand what the word tariffmeans and how it affects them
personally, as far as theirpockets go.
All right.
So the basic breakdown is isthat a tariff is a tax on
imported goods and, to clarify,the country that the goods are
(03:52):
coming from is not paying thetariff.
So if we're importing stufffrom China, china doesn't pay
the tariff.
Just to clarify, the company inthe US that is importing the
goods from China to use in theirproduction or to sell is the
one that pays the tax.
So when a company needs a part,let's say, you know, you have a
(04:13):
company that makes phones and apiece of their phone they need
to make it is imported fromChina.
So that company pays the tariff, the tax, on that good that's
coming from China.
So that company pays the tariff, the tax, on that good that's
coming from China, and what theyend up doing is they pass down
that additional cost to theconsumer in the way of
increasing the cost of that good.
So ultimately, who pays thetariff?
(04:36):
Us, us, as consumers ofproducts, we are the ones that
pay it.
You can get upset with me ifyou're listening to this and
saying that I'm wrong.
I don't care, because this isnot my opinion.
This is just what a tariff is.
Speaker 1 (04:51):
Even if somebody is screaming it from the rooftops
and saying that the country ispaying the tariffs.
That's simply just not the case.
Speaker 2 (04:58):
Yeah, if you are listening to the president who
is saying the incorrectdefinition of what a tariff is,
you are one dumb or twodelusional, because now everyone
knows what a tariff is at thispoint in time it's all we talk
about it's not a debate.
It's a definition of a word.
It's not a debate.
What it is, we know what it is.
Speaker 1 (05:20):
It's like all we talk about.
I mean, if we had a dollar forevery time we heard the word
tariff in a day, we'd all begood.
Yeah, we wouldn't be worriedabout them.
Speaker 2 (05:28):
You know, since we are focused on the millennials
and elder millennials, you'refeeling it in your pockets in
pretty much everything that youbuy, because, hey, the US
imports a lot of things.
Speaker 1 (05:39):
Most things.
Speaker 2 (05:45):
So, for example, if you're looking to buy a home, a
lot of our lumber that is usedin the building of homes is
imported.
So when you put a tariff on acountry like Canada, where a
majority of our lumber isimported, now these home
builders are paying more for thematerials to build your house
and that's going to be passeddown to costing more to buy a
house.
Speaker 1 (06:01):
And it's already so expensive to buy a house.
Speaker 2 (06:03):
Yeah, and the crazy thing, this is such a simple
concept.
The fact that there was so muchdebate around this is just
insane, because it's a verysimple concept.
Yeah, a tariff has been thesame since the introduction of a
tariff.
Speaker 1 (06:18):
What do you mean?
We're not changing definitions.
All right, real quick.
Speaker 2 (06:23):
All right, real quick .
I want to speak to the personlistening who feels like they
can't work with a financialplanner yet because they're
carrying a lot of debt.
First of all, I see you and Ineed you to know.
You're not broken, you're notbehind.
You're just in a tough season.
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(06:51):
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This is about helping you getunstuck, not making you feel
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(07:11):
If this sounds like what you'vebeen needing, go ahead and
schedule a call with me.
The link is in the show notes.
Let's take the first steptogether.
Speaker 1 (07:24):
Why are the emergency funds, especially now, so much
more important than maybe theyeven were 12, 18 months ago?
Speaker 2 (07:33):
Well, let's first start out with the definition of
emergency fund.
You know the definition ofemergency fund is that you have
money to handle quote unquote anemergency.
So, with so much uncertainty inthe economy and the US as a
whole, having more money to getthrough the unknown, it's going
to be more, it's going to bebeneficial for you.
So the most the easiest one wecan think of is layoffs.
(07:55):
You know, for example, having agovernment job it used to be
you have a job for life, like,oh, you want, you want something
good.
Get a good government job,you'll be good to go.
Not the case anymore, becauseyou have a lot of these
government agencies, any companythat has some government or
(08:16):
companies that had somegovernment funding aspects, and
their funding is being rejected.
So now they're laying off agood portion of the workforce,
and so the emergency fund iscrucial.
When it comes to experiencing alayoff, the idea is that you
have enough money built up sothat you can still pay for your
needs.
Your life doesn't necessarilyhave to change immediately when
you're laid off, because youhave this emergency fund built
(08:37):
up so that you can pay for yourrent, you could pay for your
mortgage, you could pay for thethings that your kids need, you
could pay for the food, thepulling your table, the closing
your back.
That's the idea of emergencyfund.
Speaker 1 (08:48):
And your emergency fund should be sitting in a high
yield savings account.
Speaker 2 (08:51):
Yes.
Speaker 1 (08:52):
Your investments are not your emergency fund because
you can't access them easily.
Speaker 2 (08:56):
I cannot stress that enough.
Speaker 1 (08:57):
And it's okay, when you need to, to use your
emergency fund in the event ofan emergency, because that's
what you're saving it for.
But, more importantly, it needsto be in a high yield savings
account and it needs to beaccessible.
Speaker 2 (09:10):
I cannot stress that enough, that your emergency fund
should not be invested ever.
By definition, if you'reinvesting in, it is not an
emergency fund.
The idea of an emergency fundis that you have a sum of money
that is not losing.
You know you're not losing theprincipal that you put in and
(09:30):
you could have it easilyaccessible, without any
penalties to access accessing it, be it tomorrow or whatever you
need.
The idea is this is that youdon't know when an emergency is
going to come up, so you don'twant to have it invested where
potentially the market could bedown.
And now you know say you had$50,000 in emergency fund and
you actually invested it insteadof putting in a high yield
savings account and the market'sdown and now you get 40,000,
(09:53):
but then emergency happens andnow you need money and you have
less money than you put in.
Speaker 1 (09:57):
Right.
Speaker 2 (09:57):
Yes, so you need to separate your investing money
from your emergency savingsmoney.
Speaker 1 (10:02):
And your investing money.
Is that long-term horizon?
Speaker 2 (10:05):
right, it's the long game.
Speaker 1 (10:07):
The high-yield savings that you're going to put
your emergency fund in is, inthe event of a short-term
emergency, that you can pullfrom and access easily.
Speaker 2 (10:20):
Yeah, and normally we used to hear the rule of thumb
of three to six months worth ofexpenses for an emergency fund.
I, honestly, have always beenoperating on kind of more than
that when I work with my clients.
Now if they say I have a hardline in the sand and they want
only six months, I'm not goingto argue back and forth with
them, but I've always been anadvocate for a little bit more.
(10:40):
And you know one of the youknow, financial, uh, social
media influence I wouldn't evencall him.
He was before social mediaaround.
So one of the finance guys,ramit Sethi, always refers to it
as a 12 month war chest and theability just to get through any
uncertain times.
So I am a big advocate ofleaning more towards that one
year because basically what it'sdoing is it's just giving you a
(11:01):
longer personal runway for ifsomething comes up that you
didn't expect.
Speaker 1 (11:07):
And it's okay if you can't save a year's worth of
savings in the next couple ofweeks.
Speaker 2 (11:14):
Nobody's expecting that Majority of people can't do
that, but again, it's better tosave something than nothing.
Speaker 1 (11:19):
So you have to first calculate your expenses, right?
I think that's really importantis how much do you need to live
, to pay your rent, to keep yourlights on, to keep your water
on, to keep the fridge stocked?
How much does that cost you ina month, right?
What do you pay in gas to getto work?
What does daycare cost so thatyou can actually go to work?
(11:41):
All those necessary expenses?
Add them together so that youknow this is what it costs for
me, to quote unquote live,survive, thrive.
In a month that does not includeyour spa weekend and your
brunches and the soccer you knowlike those are nice to have.
Those aren't need to have.
So if you can cover those in anemergency fund, obviously
(12:03):
that's the ideal scenario.
No-transcript.
Calculate all of that and thenstart working towards.
What does that look like for amonth, for two months, for three
months, all the way up to 12months or beyond.
If you are in a field that isvery volatile or has a high
(12:24):
turnover, you might want 18months.
If you are a family that has alot of expenses throughout a
given month, you might want morethan 12 months, right?
I mean, everybody's situationis their own, but you have to
run the numbers and do the math.
Speaker 2 (12:41):
Having a properly funded emergency fund.
I cannot stress how importantand freeing that can be, because
even in times when there is aneconomic uncertainty let's just
say you know jobs are booming,the stock market's booming
Having that emergency fund canalso allow you a lot of freedom
in other areas.
So, for example, let's just saythe work environment that
(13:02):
you're in has turned extremelytoxic and that is bleeding over
into your own personal life.
You know, with your family,your spouse, your mental health,
having an adequate emergencyfund, I can justify that being
an emergency, that you shouldnot be working that job.
And even if you don't haveanother job lined up, you have
this emergency fund that canallow you to quit that job and
get out of that toxic scenarioand find another job.
Speaker 1 (13:24):
That's why some people call it an FU fund.
Speaker 2 (13:26):
Yeah.
Speaker 1 (13:27):
Because you can say you know F this, I'm not doing
this anymore, I don't need to bein this relationship.
I don't need to stay in thisenvironment, don't need to be in
this relationship.
Speaker 2 (13:36):
I don't need to stay in this environment and I have
money to give me options because, again, it's a tool and think
about how much stress a lot ofpeople carry when it comes to
the uncertain as far as like, oh, I might be laid off.
I work in a sector where we dohave government funding.
I haven't been laid off yet,but I might be laid off.
If you have that emergency fundproperly funded, I think that
it could alleviate not all thestress because I still think
(13:57):
you're going to have some stressof losing your job but it could
definitely alleviate a portionof it because you know that if
that did happen, that you stillhave money to pay your bills and
your life can still continue on.
Speaker 1 (14:07):
You have a cushion?
Yes, it makes a difference.
Well, let's talk about the fiveways people can either boost
their emergency fund, if it'ssomething that they already have
or are actively working ongrowing, or for the people who
are like I just don't have it,like I don't know where I can
find extra money, how can theyget started?
Let's talk about that.
Speaker 2 (14:28):
Yeah, I would say, with the environment that we're
in, maybe you know, being morefocused on the emergency fund
and being a little bit morehyper aware of trying to fund it
as much as you can and quickershould be a focus, and there are
some ways that you can do this.
So first and foremost, you know, cut your frivolous spending.
You know all the stuff thatyou're spending.
That's just fluff stuff.
You know Uber Eats some of yoursubscription services going to
(14:50):
the spa, stuff of that naturethat are wants, not needs.
Maybe cut some of those,because then that can free up
extra money that you can puttowards your emergency fund
Right?
Speaker 1 (14:58):
And again, things are temporary, so you might not
have to cancel that subscriptionforever, but maybe you do it
for four months.
Maybe you go down from fivesubscriptions for TV to one
subscription, you know.
Focus on the one where youwatch the most and everything
else you get rid of for the nextsix months.
How much money can that putback into your pocket?
(15:19):
What subscriptions did you meanto cancel that you haven't
canceled?
What free trials you knowturned from free trials into?
Oh, I forgot to disconnect mycredit card and now you're
actually paying for that service.
Speaker 2 (15:32):
Yeah, and I'm not saying that you have to cut
everything.
That's not what I'm saying,because I still believe in
enjoying a certain portion ofthings today, because tomorrow's
not promised.
But you also need to be focusedon what your goals are and
making sure that you areprioritizing those goals that
you deem to be valuable.
So by cutting some of the stuff, you might even realize, hey,
like I didn't even watch thisstreaming service, why was I
(15:55):
paying for it?
Or I don't even really missgoing to do this or whatever you
know, because I mean, like wedon't use Uber Eats.
But I am sometimes astonishedand when I sit down with people,
it's more, I would say, it'smore single people that when I
look at you know their expenses,how much they don't even
realize how much they'respending in Uber Eats.
Speaker 1 (16:15):
I mean they, they clearly have a corner market.
But the only time we use it isbecause we get the $15 credit on
our Amex.
But even then it's very, veryrarely used, mostly wasted.
But yeah, the added taxes, fees, delivery, I mean it, just it
adds up.
You know, your $10 Kava bowl isnow $27.
Speaker 2 (16:39):
And another area is holding off on big purchases.
So, for example, like if youwere looking to buy a car, do
you need a car or do you want acar?
That's two different things.
Now, obviously, if you need tobuy a car because your car that
you have or you don't have a caris the car that you have not
working, then obviously you doneed to get a car.
But do you need to get a newcar?
You know kind of weighing thoseoptions.
(17:01):
Or you know if you're going todo a big renovation, if you
haven't already saved up moneyfor that renovation, is this a
renovation that you need to donow or could you possibly hold
off to build up your emergencyfund and then do the renovation
on a later date?
And once again, this is reallycoming down to prioritizing
what's important, because youhave to be really good at
deciphering between what arewants and needs and sometimes
(17:23):
those wants.
They need to be delayed inorder to satisfy the needs.
Speaker 1 (17:27):
What about?
I'm going to push back here alittle bit.
What about the needs and thenthe tariffs?
Right, like if you need a newrefrigerator do I wait.
Speaker 2 (17:37):
Remember what I said.
Okay, I said do you needsomething or do you want?
Speaker 1 (17:41):
something, so this is only for the one, correct.
Speaker 2 (17:43):
If you have a refrigerator that is working,
perfectly fine just from anaesthetic standpoint and an
upgrade standpoint.
You want a new one.
Speaker 1 (17:49):
You're like I want the water and the ice maker.
Yeah.
Speaker 2 (17:56):
Or I want all the computer stuff on the front of
the touchscreen.
That could be a want.
If your refrigerator is working, fine, now obviously, if your
refrigerator is broken and itdoesn't function anymore, then
yes, you need to buy a newrefrigerator, right?
So it's deciphering betweenthose, because I'm not going to
call you out, but I'm going tocall you out where sometimes you
were like oh, let's get this.
I'm like well, we already havethis and it functions fine.
You just want somethingdifferent of it.
Speaker 1 (18:16):
I want a prettier one .
Speaker 2 (18:18):
Exactly, which is fine as long as you have the
money to pay for it.
In these scenarios, I'm sayingthat you haven't saved up for
these large ticket items, andit's a want, not a need.
Speaker 1 (18:27):
Right, okay, that's fair.
Speaker 2 (18:30):
Now the next two are going to be kind of
counterproductive to what mostpeople hear, maybe on social
media.
Speaker 1 (18:37):
Okay.
Speaker 2 (18:38):
So say you have debt that you're paying down and
you're making extra payments ontop of the minimum payment that
you have for debt.
Maybe it might be morebeneficial at this point in time
to possibly hold off on makingthose extra payments, depending
on what the debt is.
Speaker 1 (18:53):
Are you talking about low interest debt?
Speaker 2 (18:55):
Correct Low interest debt, so what?
Speaker 1 (18:56):
10% or less, 7% or less.
Speaker 2 (18:59):
Yeah, around there.
So these are going to be things.
Obviously, your mortgage,student loan, debt those are
going to be the two main onesthat we're looking at and maybe
you somehow have a refinancedpersonal loan that's a low debt.
Whatever it may be any of thelow interest rate debt maybe you
hold off on making those extrapayments.
So let's just say your paymentis $200 and you were paying an
(19:19):
additional $150 on top of thatto get rid of it.
Maybe, for the time being, that$150 would be better allocated
to go into building up youremergency fund right now.
Speaker 1 (19:28):
Okay, so low interest debt.
We want to get rid of highinterest debt.
That's your credit cards at 27%, right, but these are the
things that are already lowinterest.
I know we have a personal loanthat's at 0%, so we're making a
little bit more than the minimumpayment, because I think the
minimum payment is like $63 andI usually just pay 100 towards
(19:48):
it, but it's really not on myradar.
I mean, we have a plan for it,but it's not on my radar when it
comes to our overall debts,because right now it's sitting
at 0% interest.
So you know again, you have toknow what are you paying, what's
the interest, and make a planfor it.
We've talked about that inprevious episodes.
Speaker 2 (20:08):
And the other area where you could possibly free up
some more money to go towardsyour emergency fund is 401k
contributions.
Go towards your emergency fundis 401k contributions, so you
might think about lowering theamount that you're contributing
to your 401k plan and have thatmoney go into your emergency
fund, because you need toremember that the 401k plan is a
long-term strategy.
But what good is a long-termstrategy if you can't make it
(20:29):
through tomorrow or the nextweek?
Speaker 1 (20:31):
Now would you recommend that people go lower
than their company match or tryto stick with at least their
company match, but nothing over.
Speaker 2 (20:39):
I would try to stick with your company match.
So let's just say you'recontributing 5% to your 401k
plan and your company match is3%.
Maybe you go ahead and loweryour contribution to 3% so that
you are taking full advantage ofthe company match and the free
money that comes with it.
And that additional 2% that youhad going into your 401k plan
maybe better suited to go intoyour emergency fund.
(20:59):
And remember, this is for atime period because you have a
um, uh, you have a goal of whatyou're trying to have for your
emergency fund as far as, likeyou know if you're shooting for
that 12 month of expenses, youknow that number.
So once you've reached thatnumber, then you can start
allocating that money back towhere it was before as far as
going to your 401k plan, payingoff low interest debt.
(21:22):
So you need to have a plan inplace and an idea of I'm
contributing this amount, I'mtrying to reach this amount.
What is that timeframe going tolook like, based upon what I'm
contributing?
Speaker 1 (21:32):
So it's temporary.
You have to wrap your mindaround the fact that this is not
forever, but we're makingtemporary sacrifices so that we
can sleep easier at night,knowing that we can cover an
emergency if and when it happens.
And the reality is is it's notif, it is when.
Speaker 2 (21:49):
Yeah, and this is where the strategic financial
planning can come into place.
So, you're not just doing randomthings and reacting to random
things around you.
You are actually sitting downand talking about the goals that
you're trying to accomplish,problems that you're trying to
overcome, the risk that you aretrying to mitigate and put a
(22:11):
plan in place to attack allthose in a strategic way.
Because, as we said before,obviously know, obviously
investing for the future, forwhen you want to become work
optional, is important, but whatwould you say is more important
Investing for 30 years down theline or getting through a
layoff tomorrow?
Because I could tell you, ifyou can't get through a layoff
tomorrow, you're not going tohave the money to invest for the
(22:32):
30-year period anyways.
Speaker 1 (22:33):
Yeah, because it all has that ripple, that ripple
effect.
Speaker 2 (22:36):
Yeah, cause I've said it before Most people, your
most valued asset is yourability to bring in a future
income.
So all the plans and dreams andgoals you have in place are
often based upon you being ableto bring in an income tomorrow.
Speaker 1 (22:50):
Right, if you could leave somebody listening with a
challenge for today, what wouldit be Like?
What do you want them to walkaway with today to help boost
the emergency fund?
Start the emergency fund.
What are you thinking?
Speaker 2 (23:06):
Well, first, what you would need to do is how much do
you already have an emergencyfund?
Do you already have one set up?
Speaker 1 (23:13):
All right.
Do you have a high yieldsavings account?
Speaker 2 (23:16):
Yeah, and is it the 12 month amount that you need?
So most people out there it'sprobably not going to be that,
and that's okay.
That is okay Because that'sgoing to be the majority people.
They don't have the adequateemergency fund.
But now what we need to do isto figure out how much is 12
months of expenses for us.
So figure out on a monthlybasis what are your needs.
(23:39):
You know we're taking out theones, so you know you go in and
get a massage every month.
It's not a necessity for thosepeople.
You can live without it for alittle bit, if needed.
Yes, so determine what your 20month worth of needs is and then
obviously multiply that by 12.
And that will give you theamount that you need as a goal
for your 12-month emergency fund.
Speaker 1 (24:02):
But start small Mentally.
If that number is very large,don't let that paralyze you into
saying, well, I can't have$50,000.
Speaker 2 (24:12):
Start with that one-month goal Right, or start
with $100.
Start with $1,000.
Speaker 1 (24:15):
Start with that one month goal, or start with $100.
Start with $1,000.
Speaker 2 (24:17):
What I mean by that is that I understand the
feelings that can come withseeing such a large number, but
you do need to know what youneed to hit, because then you're
just blindly.
You're just blindly goingforward.
So you do need to know what youneed to hit, but that's not
what you focus on once you knowthat number.
So once you know the 12 monthamount, we're not looking at the
(24:38):
number anymore, we've alreadybroken down like, hey, what's
the one month amount, so that wecan hit that the two month
amount.
And you need to also, like Isaid, look through your budget
to see how much you can actuallycontribute to that account
currently today.
All right.
And then that's when you havethe second step, where you look
at areas that maybe you can cutto build up that emergency fund
quicker.
Speaker 1 (24:57):
Right.
Where can you make short-termsacrifices?
Where can you find the extrafive, 10, $15 to put into the
emergency fund, so that thatnumber is growing towards the
12-month savings?
Speaker 2 (25:12):
And there's one thing that I did kind of leave out
but I do want to mention is thatyou know, because this was a
situation that happened to us,when Jess got laid off, she
essentially had a six-monthseverance package.
Now, with a large company likewhat she was at, I think that
pretty much that's going to bein place, but I wouldn't always
(25:32):
just lean on that severancepackage because it's not
guaranteed.
Speaker 1 (25:37):
Things like that can get ripped from you pretty
easily, and you don't want to beleft relying on something that
you thought was going to existand then doesn't.
Speaker 2 (25:49):
Yeah.
So, for example, you don't wantto be a person who's like oh
well, you know, I already knowthat I have a six-month
severance package.
If I get laid off, then I onlyneed six months of emergency
fund expenses.
I wouldn't bank on that because, as you said, a severance
package is not guaranteed.
Speaker 1 (26:02):
Right, it's a nice to have.
Yeah, right, it's a nice tohave, and it's a nice to get,
but unless you have that writtensomewhere in your contract that
you're guaranteed a six-monthseverance and covered health,
(26:23):
insurance and early stockvesting should be in good shape,
or maybe you don't end uphaving to touch your emergency
fund and you can only operateoff of the severance, which
would be the ideal scenario.
But you want to plan for theworst and hope for the best.
Speaker 2 (26:37):
Yes, and, and don't leave those things up to chance
and, you know, the biggest thingthat we also stress here is
that you don't have to sit downand do these things all at once
and take a two or three hourtime frame at one time to do all
this stuff.
Speaker 1 (26:49):
No, don't do that.
Speaker 2 (26:50):
Break it down into much more manageable time frames
to do so.
It makes it a lot easier foryou so you don't get stressed
and overwhelmed and don't getwore out before you actually
accomplish a goal, because ifyou try to sit down and do all
this at one time, more thanlikely you're going to get
overwhelmed and then you're notgoing to do anything.
Speaker 1 (27:05):
Yeah, and then you'll just seize right back up and
nothing will get done.
So take it in bite-sized littlechunks, because it can feel
overwhelming and we don't wantthat to be the case.
But we do want you to beprepared and we do want you to
be intentional about puttingsomething away every, you know,
every week, every month, howeveryou do it.
Some people do daily savingschallenges, all sorts of things,
(27:28):
but just be mindful that reallywe cannot operate in this day
and age without an emergencyfund.
Hopefully this was helpful.
If you have any other tips ortricks in how you've been able
to build your emergency fund,please reach out and let us know
so that we can share it withour audience.
We will link our two high yieldsavings accounts that we use.
(27:52):
Well, one of them is a highyield savings account through
ally.
The other is a high yieldaccount, technically not a
savings account, although youwill get around 4% interest,
which is nice, but we will linkboth of those.
We personally have money inboth of these accounts and we
like the interfaces that areonline.
(28:14):
It's easy to set up and thatway we are earning money as it
just sits there because it'sthere for an emergency.
But we hope this was helpful.
Share this episode with a friend.
Leave a review, if you have notalready, and we thank you for
listening.
We'll talk to you soon, don'tforget.
Benjamin Franklin said aninvestment in knowledge pays the
(28:36):
best interest.
You just got paid.
Until next time, sugar.
Speaker 2 (28:40):
Teddy.
Speaker 1 (28:41):
Podcast yo Learn how to make them pockets grow
Financial freedom's where we goSmart investments, money flow.
Thanks for listening to today'sepisode.
We are so glad to have you aspart of our sugar daddy
community.
If you learned something today,please remember to subscribe,
rate, review and share thisepisode with your friends,
(29:01):
family and extended network.
Don't forget to connect with uson social media at the sugar
daddy podcast.
You can also email us yourquestions you want us to answer
for our past the sugar segmentsat the sugar daddy podcast at
gmailcom or leave us a voicemailthrough our Instagram.
Speaker 2 (29:19):
Our content is intended to be used, and must be
used, for informationalpurposes.
It is very important to do yourown analysis before making any
investment, based upon your ownpersonal circumstances.
No-transcript.
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Prices are creeping up again,and if you're already feeling
stretched, this episode is yourwake-up call.
With new tariffs shaking theeconomy, now is the time to
build a serious emergency fund,not someday now.
In this episode we're breakingdown what's really going on with
inflation, why the oldthree-month savings rule won't
cut it anymore, and five smart,doable ways to start stacking
your safety net fast.
(01:11):
Because peace of mind, that isthe ultimate flex.
If you've ever felt behindoverwhelmed or one unexpected
bill away from panic, thisepisode is for you.
Hey, babe, what are we talkingabout today?
Speaker 2 (01:42):
Today, we are talking about our emergency funds and
why we need to get them lookingright yeah.
Speaker 1 (01:48):
Unfortunately, we are in, I would say, somewhat
unprecedented times.
Oh my gosh, every time somebodysays that a unicorn dies.
Speaker 2 (01:54):
But the focus of the episode today is, as you said,
on emergency funds.
I would say that this is one ofthe first steps you should have
when it comes to bettering yourfinancial situation and I would
say most people, this is thestuff they don't have in place
yet.
Speaker 1 (02:11):
Yeah, like what?
One in three Americans can'tcover a $400 emergency.
Speaker 2 (02:16):
I think it's more than that maybe, but something
around there.
Speaker 1 (02:18):
It's, it's sad and emergencies constantly are
happening.
You know, like literallyremember how our parents used to
be like if it's not one thing,it's another yeah, it literally
is always one thing or another Imean it is never ending yeah,
that's adulting, unfortunatelyoh my gosh, I'm so over it.
Speaker 2 (02:36):
It's the worst yeah, and unfortunately, with the way
the economy is working now, ornot working, I would say that it
is actually more important thanever to really focus on making
sure that you have an adequateemergency fund.
Speaker 1 (02:52):
Well, and not to mention, obviously, the cost of
everything is skyrocketing andyou can't get out of the grocery
store for under $100.
And then you walk out and youhave two bags in your hand and
you're like, wait, what did Ijust buy?
And these are just snacks forthe next 48 hours.
I mean that's ridiculous.
But then also just life ingeneral.
I mean the layoffs are.
(03:14):
They just keep coming.
And I mean, if you're payingattention at all, you probably
have somebody in your circlewho's gotten laid off, whether
they're at a big company or theywork in nonprofit.
I mean it's just scary.
Speaker 2 (03:28):
Yeah, and a good portion of our country doesn't
understand what the word tariffmeans and how it affects them
personally, as far as theirpockets go.
All right.
So the basic breakdown is isthat a tariff is a tax on
imported goods and, to clarify,the country that the goods are
(03:52):
coming from is not paying thetariff.
So if we're importing stufffrom China, china doesn't pay
the tariff.
Just to clarify, the company inthe US that is importing the
goods from China to use in theirproduction or to sell is the
one that pays the tax.
So when a company needs a part,let's say, you know, you have a
(04:13):
company that makes phones and apiece of their phone they need
to make it is imported fromChina.
So that company pays the tariff, the tax, on that good that's
coming from China.
So that company pays the tariff, the tax, on that good that's
coming from China, and what theyend up doing is they pass down
that additional cost to theconsumer in the way of
increasing the cost of that good.
So ultimately, who pays thetariff?
(04:36):
Us, us, as consumers ofproducts, we are the ones that
pay it.
You can get upset with me ifyou're listening to this and
saying that I'm wrong.
I don't care, because this isnot my opinion.
This is just what a tariff is.
Speaker 1 (04:51):
Even if somebody is screaming it from the rooftops
and saying that the country ispaying the tariffs.
That's simply just not the case.
Speaker 2 (04:58):
Yeah, if you are listening to the president who
is saying the incorrectdefinition of what a tariff is,
you are one dumb or twodelusional, because now everyone
knows what a tariff is at thispoint in time it's all we talk
about it's not a debate.
It's a definition of a word.
It's not a debate.
What it is, we know what it is.
Speaker 1 (05:20):
It's like all we talk about.
I mean, if we had a dollar forevery time we heard the word
tariff in a day, we'd all begood.
Yeah, we wouldn't be worriedabout them.
Speaker 2 (05:28):
You know, since we are focused on the millennials
and elder millennials, you'refeeling it in your pockets in
pretty much everything that youbuy, because, hey, the US
imports a lot of things.
Speaker 1 (05:39):
Most things.
Speaker 2 (05:45):
So, for example, if you're looking to buy a home, a
lot of our lumber that is usedin the building of homes is
imported.
So when you put a tariff on acountry like Canada, where a
majority of our lumber isimported, now these home
builders are paying more for thematerials to build your house
and that's going to be passeddown to costing more to buy a
house.
Speaker 1 (06:01):
And it's already so expensive to buy a house.
Speaker 2 (06:03):
Yeah, and the crazy thing, this is such a simple
concept.
The fact that there was so muchdebate around this is just
insane, because it's a verysimple concept.
Yeah, a tariff has been thesame since the introduction of a
tariff.
Speaker 1 (06:18):
What do you mean?
We're not changing definitions.
All right, real quick.
Speaker 2 (06:23):
All right, real quick .
I want to speak to the personlistening who feels like they
can't work with a financialplanner yet because they're
carrying a lot of debt.
First of all, I see you and Ineed you to know.
You're not broken, you're notbehind.
You're just in a tough season.
I created something just foryou because I've had people
reach out who are serious aboutchanging their money story.
But the full financial planningpackage just wasn't the right
(06:51):
fit yet.
So I built a new servicethrough Oak City Financial
that's focused completely ondebt reduction no fluff, no
shame.
You'll get a one-time planningsession, a personalized payoff
strategy, your own financialdashboard and monthly coaching.
If you want extra support whileyou climb out, it's $300 to get
started and $100 a month.
If you want that ongoingguidance, that's it.
This is about helping you getunstuck, not making you feel
like you failed.
(07:11):
If this sounds like what you'vebeen needing, go ahead and
schedule a call with me.
The link is in the show notes.
Let's take the first steptogether.
Speaker 1 (07:24):
Why are the emergency funds, especially now, so much
more important than maybe theyeven were 12, 18 months ago?
Speaker 2 (07:33):
Well, let's first start out with the definition of
emergency fund.
You know the definition ofemergency fund is that you have
money to handle quote unquote anemergency.
So, with so much uncertainty inthe economy and the US as a
whole, having more money to getthrough the unknown, it's going
to be more, it's going to bebeneficial for you.
So the most the easiest one wecan think of is layoffs.
(07:55):
You know, for example, having agovernment job it used to be
you have a job for life, like,oh, you want, you want something
good.
Get a good government job,you'll be good to go.
Not the case anymore, becauseyou have a lot of these
government agencies, any companythat has some government or
(08:16):
companies that had somegovernment funding aspects, and
their funding is being rejected.
So now they're laying off agood portion of the workforce,
and so the emergency fund iscrucial.
When it comes to experiencing alayoff, the idea is that you
have enough money built up sothat you can still pay for your
needs.
Your life doesn't necessarilyhave to change immediately when
you're laid off, because youhave this emergency fund built
(08:37):
up so that you can pay for yourrent, you could pay for your
mortgage, you could pay for thethings that your kids need, you
could pay for the food, thepulling your table, the closing
your back.
That's the idea of emergencyfund.
Speaker 1 (08:48):
And your emergency fund should be sitting in a high
yield savings account.
Speaker 2 (08:51):
Yes.
Speaker 1 (08:52):
Your investments are not your emergency fund because
you can't access them easily.
Speaker 2 (08:56):
I cannot stress that enough.
Speaker 1 (08:57):
And it's okay, when you need to, to use your
emergency fund in the event ofan emergency, because that's
what you're saving it for.
But, more importantly, it needsto be in a high yield savings
account and it needs to beaccessible.
Speaker 2 (09:10):
I cannot stress that enough, that your emergency fund
should not be invested ever.
By definition, if you'reinvesting in, it is not an
emergency fund.
The idea of an emergency fundis that you have a sum of money
that is not losing.
You know you're not losing theprincipal that you put in and
(09:30):
you could have it easilyaccessible, without any
penalties to access accessing it, be it tomorrow or whatever you
need.
The idea is this is that youdon't know when an emergency is
going to come up, so you don'twant to have it invested where
potentially the market could bedown.
And now you know say you had$50,000 in emergency fund and
you actually invested it insteadof putting in a high yield
savings account and the market'sdown and now you get 40,000,
(09:53):
but then emergency happens andnow you need money and you have
less money than you put in.
Speaker 1 (09:57):
Right.
Speaker 2 (09:57):
Yes, so you need to separate your investing money
from your emergency savingsmoney.
Speaker 1 (10:02):
And your investing money.
Is that long-term horizon?
Speaker 2 (10:05):
right, it's the long game.
Speaker 1 (10:07):
The high-yield savings that you're going to put
your emergency fund in is, inthe event of a short-term
emergency, that you can pullfrom and access easily.
Speaker 2 (10:20):
Yeah, and normally we used to hear the rule of thumb
of three to six months worth ofexpenses for an emergency fund.
I, honestly, have always beenoperating on kind of more than
that when I work with my clients.
Now if they say I have a hardline in the sand and they want
only six months, I'm not goingto argue back and forth with
them, but I've always been anadvocate for a little bit more.
(10:40):
And you know one of the youknow, financial, uh, social
media influence I wouldn't evencall him.
He was before social mediaaround.
So one of the finance guys,ramit Sethi, always refers to it
as a 12 month war chest and theability just to get through any
uncertain times.
So I am a big advocate ofleaning more towards that one
year because basically what it'sdoing is it's just giving you a
(11:01):
longer personal runway for ifsomething comes up that you
didn't expect.
Speaker 1 (11:07):
And it's okay if you can't save a year's worth of
savings in the next couple ofweeks.
Speaker 2 (11:14):
Nobody's expecting that Majority of people can't do
that, but again, it's better tosave something than nothing.
Speaker 1 (11:19):
So you have to first calculate your expenses, right?
I think that's really importantis how much do you need to live
, to pay your rent, to keep yourlights on, to keep your water
on, to keep the fridge stocked?
How much does that cost you ina month, right?
What do you pay in gas to getto work?
What does daycare cost so thatyou can actually go to work?
(11:41):
All those necessary expenses?
Add them together so that youknow this is what it costs for
me, to quote unquote live,survive, thrive.
In a month that does not includeyour spa weekend and your
brunches and the soccer you knowlike those are nice to have.
Those aren't need to have.
So if you can cover those in anemergency fund, obviously
(12:03):
that's the ideal scenario.
No-transcript.
Calculate all of that and thenstart working towards.
What does that look like for amonth, for two months, for three
months, all the way up to 12months or beyond.
If you are in a field that isvery volatile or has a high
(12:24):
turnover, you might want 18months.
If you are a family that has alot of expenses throughout a
given month, you might want morethan 12 months, right?
I mean, everybody's situationis their own, but you have to
run the numbers and do the math.
Speaker 2 (12:41):
Having a properly funded emergency fund.
I cannot stress how importantand freeing that can be, because
even in times when there is aneconomic uncertainty let's just
say you know jobs are booming,the stock market's booming
Having that emergency fund canalso allow you a lot of freedom
in other areas.
So, for example, let's just saythe work environment that
(13:02):
you're in has turned extremelytoxic and that is bleeding over
into your own personal life.
You know, with your family,your spouse, your mental health,
having an adequate emergencyfund, I can justify that being
an emergency, that you shouldnot be working that job.
And even if you don't haveanother job lined up, you have
this emergency fund that canallow you to quit that job and
get out of that toxic scenarioand find another job.
Speaker 1 (13:24):
That's why some people call it an FU fund.
Speaker 2 (13:26):
Yeah.
Speaker 1 (13:27):
Because you can say you know F this, I'm not doing
this anymore, I don't need to bein this relationship.
I don't need to stay in thisenvironment, don't need to be in
this relationship.
Speaker 2 (13:36):
I don't need to stay in this environment and I have
money to give me options because, again, it's a tool and think
about how much stress a lot ofpeople carry when it comes to
the uncertain as far as like, oh, I might be laid off.
I work in a sector where we dohave government funding.
I haven't been laid off yet,but I might be laid off.
If you have that emergency fundproperly funded, I think that
it could alleviate not all thestress because I still think
(13:57):
you're going to have some stressof losing your job but it could
definitely alleviate a portionof it because you know that if
that did happen, that you stillhave money to pay your bills and
your life can still continue on.
Speaker 1 (14:07):
You have a cushion?
Yes, it makes a difference.
Well, let's talk about the fiveways people can either boost
their emergency fund, if it'ssomething that they already have
or are actively working ongrowing, or for the people who
are like I just don't have it,like I don't know where I can
find extra money, how can theyget started?
Let's talk about that.
Speaker 2 (14:28):
Yeah, I would say, with the environment that we're
in, maybe you know, being morefocused on the emergency fund
and being a little bit morehyper aware of trying to fund it
as much as you can and quickershould be a focus, and there are
some ways that you can do this.
So first and foremost, you know, cut your frivolous spending.
You know all the stuff thatyou're spending.
That's just fluff stuff.
You know Uber Eats some of yoursubscription services going to
(14:50):
the spa, stuff of that naturethat are wants, not needs.
Maybe cut some of those,because then that can free up
extra money that you can puttowards your emergency fund
Right?
Speaker 1 (14:58):
And again, things are temporary, so you might not
have to cancel that subscriptionforever, but maybe you do it
for four months.
Maybe you go down from fivesubscriptions for TV to one
subscription, you know.
Focus on the one where youwatch the most and everything
else you get rid of for the nextsix months.
How much money can that putback into your pocket?
(15:19):
What subscriptions did you meanto cancel that you haven't
canceled?
What free trials you knowturned from free trials into?
Oh, I forgot to disconnect mycredit card and now you're
actually paying for that service.
Speaker 2 (15:32):
Yeah, and I'm not saying that you have to cut
everything.
That's not what I'm saying,because I still believe in
enjoying a certain portion ofthings today, because tomorrow's
not promised.
But you also need to be focusedon what your goals are and
making sure that you areprioritizing those goals that
you deem to be valuable.
So by cutting some of the stuff, you might even realize, hey,
like I didn't even watch thisstreaming service, why was I
(15:55):
paying for it?
Or I don't even really missgoing to do this or whatever you
know, because I mean, like wedon't use Uber Eats.
But I am sometimes astonishedand when I sit down with people,
it's more, I would say, it'smore single people that when I
look at you know their expenses,how much they don't even
realize how much they'respending in Uber Eats.
Speaker 1 (16:15):
I mean they, they clearly have a corner market.
But the only time we use it isbecause we get the $15 credit on
our Amex.
But even then it's very, veryrarely used, mostly wasted.
But yeah, the added taxes, fees, delivery, I mean it, just it
adds up.
You know, your $10 Kava bowl isnow $27.
Speaker 2 (16:39):
And another area is holding off on big purchases.
So, for example, like if youwere looking to buy a car, do
you need a car or do you want acar?
That's two different things.
Now, obviously, if you need tobuy a car because your car that
you have or you don't have a caris the car that you have not
working, then obviously you doneed to get a car.
But do you need to get a newcar?
You know kind of weighing thoseoptions.
(17:01):
Or you know if you're going todo a big renovation, if you
haven't already saved up moneyfor that renovation, is this a
renovation that you need to donow or could you possibly hold
off to build up your emergencyfund and then do the renovation
on a later date?
And once again, this is reallycoming down to prioritizing
what's important, because youhave to be really good at
deciphering between what arewants and needs and sometimes
(17:23):
those wants.
They need to be delayed inorder to satisfy the needs.
Speaker 1 (17:27):
What about?
I'm going to push back here alittle bit.
What about the needs and thenthe tariffs?
Right, like if you need a newrefrigerator do I wait.
Speaker 2 (17:37):
Remember what I said.
Okay, I said do you needsomething or do you want?
Speaker 1 (17:41):
something, so this is only for the one, correct.
Speaker 2 (17:43):
If you have a refrigerator that is working,
perfectly fine just from anaesthetic standpoint and an
upgrade standpoint.
You want a new one.
Speaker 1 (17:49):
You're like I want the water and the ice maker.
Yeah.
Speaker 2 (17:56):
Or I want all the computer stuff on the front of
the touchscreen.
That could be a want.
If your refrigerator is working, fine, now obviously, if your
refrigerator is broken and itdoesn't function anymore, then
yes, you need to buy a newrefrigerator, right?
So it's deciphering betweenthose, because I'm not going to
call you out, but I'm going tocall you out where sometimes you
were like oh, let's get this.
I'm like well, we already havethis and it functions fine.
You just want somethingdifferent of it.
Speaker 1 (18:16):
I want a prettier one .
Speaker 2 (18:18):
Exactly, which is fine as long as you have the
money to pay for it.
In these scenarios, I'm sayingthat you haven't saved up for
these large ticket items, andit's a want, not a need.
Speaker 1 (18:27):
Right, okay, that's fair.
Speaker 2 (18:30):
Now the next two are going to be kind of
counterproductive to what mostpeople hear, maybe on social
media.
Speaker 1 (18:37):
Okay.
Speaker 2 (18:38):
So say you have debt that you're paying down and
you're making extra payments ontop of the minimum payment that
you have for debt.
Maybe it might be morebeneficial at this point in time
to possibly hold off on makingthose extra payments, depending
on what the debt is.
Speaker 1 (18:53):
Are you talking about low interest debt?
Speaker 2 (18:55):
Correct Low interest debt, so what?
Speaker 1 (18:56):
10% or less, 7% or less.
Speaker 2 (18:59):
Yeah, around there.
So these are going to be things.
Obviously, your mortgage,student loan, debt those are
going to be the two main onesthat we're looking at and maybe
you somehow have a refinancedpersonal loan that's a low debt.
Whatever it may be any of thelow interest rate debt maybe you
hold off on making those extrapayments.
So let's just say your paymentis $200 and you were paying an
(19:19):
additional $150 on top of thatto get rid of it.
Maybe, for the time being, that$150 would be better allocated
to go into building up youremergency fund right now.
Speaker 1 (19:28):
Okay, so low interest debt.
We want to get rid of highinterest debt.
That's your credit cards at 27%, right, but these are the
things that are already lowinterest.
I know we have a personal loanthat's at 0%, so we're making a
little bit more than the minimumpayment, because I think the
minimum payment is like $63 andI usually just pay 100 towards
(19:48):
it, but it's really not on myradar.
I mean, we have a plan for it,but it's not on my radar when it
comes to our overall debts,because right now it's sitting
at 0% interest.
So you know again, you have toknow what are you paying, what's
the interest, and make a planfor it.
We've talked about that inprevious episodes.
Speaker 2 (20:08):
And the other area where you could possibly free up
some more money to go towardsyour emergency fund is 401k
contributions.
Go towards your emergency fundis 401k contributions, so you
might think about lowering theamount that you're contributing
to your 401k plan and have thatmoney go into your emergency
fund, because you need toremember that the 401k plan is a
long-term strategy.
But what good is a long-termstrategy if you can't make it
(20:29):
through tomorrow or the nextweek?
Speaker 1 (20:31):
Now would you recommend that people go lower
than their company match or tryto stick with at least their
company match, but nothing over.
Speaker 2 (20:39):
I would try to stick with your company match.
So let's just say you'recontributing 5% to your 401k
plan and your company match is3%.
Maybe you go ahead and loweryour contribution to 3% so that
you are taking full advantage ofthe company match and the free
money that comes with it.
And that additional 2% that youhad going into your 401k plan
maybe better suited to go intoyour emergency fund.
(20:59):
And remember, this is for atime period because you have a
um, uh, you have a goal of whatyou're trying to have for your
emergency fund as far as, likeyou know if you're shooting for
that 12 month of expenses, youknow that number.
So once you've reached thatnumber, then you can start
allocating that money back towhere it was before as far as
going to your 401k plan, payingoff low interest debt.
(21:22):
So you need to have a plan inplace and an idea of I'm
contributing this amount, I'mtrying to reach this amount.
What is that timeframe going tolook like, based upon what I'm
contributing?
Speaker 1 (21:32):
So it's temporary.
You have to wrap your mindaround the fact that this is not
forever, but we're makingtemporary sacrifices so that we
can sleep easier at night,knowing that we can cover an
emergency if and when it happens.
And the reality is is it's notif, it is when.
Speaker 2 (21:49):
Yeah, and this is where the strategic financial
planning can come into place.
So, you're not just doing randomthings and reacting to random
things around you.
You are actually sitting downand talking about the goals that
you're trying to accomplish,problems that you're trying to
overcome, the risk that you aretrying to mitigate and put a
(22:11):
plan in place to attack allthose in a strategic way.
Because, as we said before,obviously know, obviously
investing for the future, forwhen you want to become work
optional, is important, but whatwould you say is more important
Investing for 30 years down theline or getting through a
layoff tomorrow?
Because I could tell you, ifyou can't get through a layoff
tomorrow, you're not going tohave the money to invest for the
(22:32):
30-year period anyways.
Speaker 1 (22:33):
Yeah, because it all has that ripple, that ripple
effect.
Speaker 2 (22:36):
Yeah, cause I've said it before Most people, your
most valued asset is yourability to bring in a future
income.
So all the plans and dreams andgoals you have in place are
often based upon you being ableto bring in an income tomorrow.
Speaker 1 (22:50):
Right, if you could leave somebody listening with a
challenge for today, what wouldit be Like?
What do you want them to walkaway with today to help boost
the emergency fund?
Start the emergency fund.
What are you thinking?
Speaker 2 (23:06):
Well, first, what you would need to do is how much do
you already have an emergencyfund?
Do you already have one set up?
Speaker 1 (23:13):
All right.
Do you have a high yieldsavings account?
Speaker 2 (23:16):
Yeah, and is it the 12 month amount that you need?
So most people out there it'sprobably not going to be that,
and that's okay.
That is okay Because that'sgoing to be the majority people.
They don't have the adequateemergency fund.
But now what we need to do isto figure out how much is 12
months of expenses for us.
So figure out on a monthlybasis what are your needs.
(23:39):
You know we're taking out theones, so you know you go in and
get a massage every month.
It's not a necessity for thosepeople.
You can live without it for alittle bit, if needed.
Yes, so determine what your 20month worth of needs is and then
obviously multiply that by 12.
And that will give you theamount that you need as a goal
for your 12-month emergency fund.
Speaker 1 (24:02):
But start small Mentally.
If that number is very large,don't let that paralyze you into
saying, well, I can't have$50,000.
Speaker 2 (24:12):
Start with that one-month goal Right, or start
with $100.
Start with $1,000.
Speaker 1 (24:15):
Start with that one month goal, or start with $100.
Start with $1,000.
Speaker 2 (24:17):
What I mean by that is that I understand the
feelings that can come withseeing such a large number, but
you do need to know what youneed to hit, because then you're
just blindly.
You're just blindly goingforward.
So you do need to know what youneed to hit, but that's not
what you focus on once you knowthat number.
So once you know the 12 monthamount, we're not looking at the
(24:38):
number anymore, we've alreadybroken down like, hey, what's
the one month amount, so that wecan hit that the two month
amount.
And you need to also, like Isaid, look through your budget
to see how much you can actuallycontribute to that account
currently today.
All right.
And then that's when you havethe second step, where you look
at areas that maybe you can cutto build up that emergency fund
quicker.
Speaker 1 (24:57):
Right.
Where can you make short-termsacrifices?
Where can you find the extrafive, 10, $15 to put into the
emergency fund, so that thatnumber is growing towards the
12-month savings?
Speaker 2 (25:12):
And there's one thing that I did kind of leave out
but I do want to mention is thatyou know, because this was a
situation that happened to us,when Jess got laid off, she
essentially had a six-monthseverance package.
Now, with a large company likewhat she was at, I think that
pretty much that's going to bein place, but I wouldn't always
(25:32):
just lean on that severancepackage because it's not
guaranteed.
Speaker 1 (25:37):
Things like that can get ripped from you pretty
easily, and you don't want to beleft relying on something that
you thought was going to existand then doesn't.
Speaker 2 (25:49):
Yeah.
So, for example, you don't wantto be a person who's like oh
well, you know, I already knowthat I have a six-month
severance package.
If I get laid off, then I onlyneed six months of emergency
fund expenses.
I wouldn't bank on that because, as you said, a severance
package is not guaranteed.
Speaker 1 (26:02):
Right, it's a nice to have.
Yeah, right, it's a nice tohave, and it's a nice to get,
but unless you have that writtensomewhere in your contract that
you're guaranteed a six-monthseverance and covered health,
(26:23):
insurance and early stockvesting should be in good shape,
or maybe you don't end uphaving to touch your emergency
fund and you can only operateoff of the severance, which
would be the ideal scenario.
But you want to plan for theworst and hope for the best.
Speaker 2 (26:37):
Yes, and, and don't leave those things up to chance
and, you know, the biggest thingthat we also stress here is
that you don't have to sit downand do these things all at once
and take a two or three hourtime frame at one time to do all
this stuff.
Speaker 1 (26:49):
No, don't do that.
Speaker 2 (26:50):
Break it down into much more manageable time frames
to do so.
It makes it a lot easier foryou so you don't get stressed
and overwhelmed and don't getwore out before you actually
accomplish a goal, because ifyou try to sit down and do all
this at one time, more thanlikely you're going to get
overwhelmed and then you're notgoing to do anything.
Speaker 1 (27:05):
Yeah, and then you'll just seize right back up and
nothing will get done.
So take it in bite-sized littlechunks, because it can feel
overwhelming and we don't wantthat to be the case.
But we do want you to beprepared and we do want you to
be intentional about puttingsomething away every, you know,
every week, every month, howeveryou do it.
Some people do daily savingschallenges, all sorts of things,
(27:28):
but just be mindful that reallywe cannot operate in this day
and age without an emergencyfund.
Hopefully this was helpful.
If you have any other tips ortricks in how you've been able
to build your emergency fund,please reach out and let us know
so that we can share it withour audience.
We will link our two high yieldsavings accounts that we use.
(27:52):
Well, one of them is a highyield savings account through
ally.
The other is a high yieldaccount, technically not a
savings account, although youwill get around 4% interest,
which is nice, but we will linkboth of those.
We personally have money inboth of these accounts and we
like the interfaces that areonline.
(28:14):
It's easy to set up and thatway we are earning money as it
just sits there because it'sthere for an emergency.
But we hope this was helpful.
Share this episode with a friend.
Leave a review, if you have notalready, and we thank you for
listening.
We'll talk to you soon, don'tforget.
Benjamin Franklin said aninvestment in knowledge pays the
(28:36):
best interest.
You just got paid.
Until next time, sugar.
Speaker 2 (28:40):
Teddy.
Speaker 1 (28:41):
Podcast yo Learn how to make them pockets grow
Financial freedom's where we goSmart investments, money flow.
Thanks for listening to today'sepisode.
We are so glad to have you aspart of our sugar daddy
community.
If you learned something today,please remember to subscribe,
rate, review and share thisepisode with your friends,
(29:01):
family and extended network.
Don't forget to connect with uson social media at the sugar
daddy podcast.
You can also email us yourquestions you want us to answer
for our past the sugar segmentsat the sugar daddy podcast at
gmailcom or leave us a voicemailthrough our Instagram.
Speaker 2 (29:19):
Our content is intended to be used, and must be
used, for informationalpurposes.
It is very important to do yourown analysis before making any
investment, based upon your ownpersonal circumstances.
No-transcript.
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