TOP IT OFF

      This step is a big one, but you should know that it is equally rewarding as it is challenging. Do you remember reading “Without a Paddle”? This was where we needed to save our first $1,000 into a savings account for problems we would have while we were attacking our debt. Well, now it’s time to Top it off.

But first, let’s recap what we should have completed at this point.

1. Current on all bills
2. We have a budget 
3. $1,000 for a rainy day
4. Paid off all consumer debt (excluding mortgage)
5. Have life insurance policy
6. Contributing to retirement 
7. College funds (optional)

          We naturally associate saving, and budgeting with sacrifice or giving something up. I want you to think about this, instead of seeing it as a negative, view it as a positive. I will tell you that the small things you sacrifice now (latest cell phone, your 7th pair of new shoes or maybe a new fridge, just because the old one doesn’t match the kitchen) are so temporary compared to the benefits of completing this step. I am going to list just 3 benefits that this step can provide, review them and really think about them because they’re going to make those “things” we gave up seem very unimportant.

What are those 3 benefits that this step can provide?

1. Increase (family) stability
2. Reduced pressure at work
3. Improved marriage (relationship)
   1.     

     Weird... none of these benefits have anything to do with money, or buying things but instead reducing stress and improving relationships. So, after reading just those 3 things, maybe we can start skipping the wants so we can start meeting the needs. Stop buying stuff you want at the moment to change your day, and start taking steps to change your life. This won’t make life more predictable, but it will make it more manageable.

What do we do?

     We need to get 3-6 months of expenses into a savings account. This can easily be combined with the initial $1,000 fund to create a good start. Remember, this account works just the same as our $1,000 fund because it is for emergencies ONLY. The purpose is to be able to sustain our household in the event of a major unexpected expense or a substantial loss of income. I would recommend a set-it and forget-it system. Determine your amount (simply look at your budget and multiply the “total expenses” by 3, or 6), establish reoccurring deposits to that account and top it off! When you determine your number, that 6-month amount is going to seem like a lot at first. But, what you will find is that as you approach the 3-month amount, 6 months won’t seem like a big deal.

Steps:
1. Determine the number (3-6 months of expenses)
2. Set-it and forget-it (reoccurring deposits)
3. Top It Off… change your life

How would you feel with $6,000 or $12,000 in an account just in case something goes wrong? It will give you peace and freedom to live and enjoy life. The reason many of us are stressed in our day-to-day is that everyone else has control over our security.

Make it or break it mentality:
“If I lose my job, we will lose the house and have nothing… how are we going to tell the kids?”

Fat & Broke mentality:
“If I lose my job, nothing changes… We keep our home, we can pay all our bills, our children will be secure and I will find another job”

So let’s Top it off, and take back the power of our own lives.