My father always had the same advice when I was growing up, no matter what, always have three months of bill payments put away in an emergency fund. He told me that before I bought a new car or did something fun like take a vacation, to make sure my emergency fund was good to go. This is a lesson I feel that is clearly lost in today’s society.
Through the media (so let’s say it’s 50 percent accurate) we saw people, government employees, seeking food from food banks and struggling to pay their rent or car payments. Had they followed my father’s golden rule, perhaps they would have had less stress. Middle class employees, unable to pay any bills due to the loss of a month’s worth of income, who clearly are living pay check to pay check, should be a great big wake up call to us all.
A personal finance program in the 1970s stated that 30 percent of your income should go to housing, 25 percent to bills/utilities, 25 percent to food, clothing and extras, and 20 percent to savings. Could you live by that program? Probably not. Today most of us pay over 50 percent of income on housing and very few put any savings aside. How people who make $2000 a month ($500 a week before taxes) can afford a $900 phone with a $100 per month service plan concerns me, but it happens.
We need to use the government shut down as a learning tool. Today, right now, start thinking about what you would do if you had no income for a month. Most of us who endured Hurricane Florence understand this completely. Many businesses were unable to open (and still are struggling), many homeowners are still suffering with damage and lack of repairs. Government groups, like FEMA, didn’t really hold up their end of the bargain, so learning how we can be better prepared, financially is critical.
We have become a society of instant gratification. We no longer plan for things months in advance and budget accordingly. Credit cards have made things too easy. Our spending habits have become the norm and therefore no one sees anything wrong with it. Technology demands we stay on top of things, no matter the cost. I was thrilled when I got a board game as a kid, now children need $60 video games that they play for a few days before moving on. We have lost the value of money.
Remember knowledge is power and making sure you have an emergency fund is more important than the latest smart phone or gadget.
Dorothy Royal is the owner of Surf City Guns and Ammo, mother of two wonderful children, ringmaster of a herd of miniature ponies and an avid member of the Surf City Writers Group and Topsail Book Club.