holistic-health,financial-wellbeing

TROUBLESHOOTING YOUR FINANCES-EMERGENCIES

By George D. Weaver

The car just malfunctioned and is in the garage and the repairs will be $1400. The washing machine just broke and you need to get a new one for $900. You need to have some dental work done and it’s not covered by your insurance, $700. All of these sorts of events are part and parcel of everyone’s daily lives and can impact your wellbeing.

They all cause us to cringe and wonder why me, why now and how am I going to pay for them without wrecking my finances for the month? When you choose to approach life from a holistic-health-financial-wellbeing angle then you begin to realize there are always solutions.

Thirty years ago, you might have had a “cookie jar” that you kept some cash stashed for emergencies. In more recent times, many have come to rely on the credit card to be the emergency valve for such events. In the current economic times, that is really a questionable solution.

We have become a society highly dependent on the credit card for living on a day-to-day basis. Although it is a solution, today it is really not a good solution.

A holistic-health approach towards financial solutions also incorporates to change the mindset on how you choose to approach these issues in life.

Compared to other interest rates in the market place, credit card rates have gotten progressively higher. Twenty years ago banks were working diligently to convert as many services as possible to electronic to keep the costs down for themselves and in turn for their customers.

Look in your own neighborhoods today and look at how many “brick and mortar” bank branches are being built, even in this recession. Those branches cost a lot to build and maintain. It certainly does not appear that the banks are suffering from the recession the way the general public is!! And with credit card rates at current levels you can see why!

So let’s look at a better holistic-health-financial-wellbeing alternative. Perhaps the most difficult part of changing how we handle these kinds of emergencies is retraining ourselves as to what action to take.

The use of the credit card has become too automatic a response. Even though it satisfies an immediate issue, 30 days later when the credit card bill arrives there is a whole new stressor in your life! And this is influencing holistic-health-financial-wellbeing.

At current credit card interest rates that can run as high as 30%, you end up paying a HUGE premium for the theoretical convenience it provides.

One of the first steps you need to take to shift from this high priced alternative is to work to establish an official Emergency Fund.

To begin with, $2000 is a good goal to set. How you come up with the money to put in that fund may take some analysis of your current spending habits and patterns.

It may be as simple as a transfer from an existing savings account or depositing this year’s tax refund but in all likelihood is going to have to be redirected from other expenditures you are making.

You may immediately see some areas where your spending has gotten a little out of control and you may need to cut back there to channel money into your new fund. If that analysis is a scary thought and you do not know how to tackle that process, I will give you some ideas in another article.

holistic-health-financial-wellbeing, connected with a good financial approach that can provide you inner peace, will create a major contributing factor towards finding different solutions in your life.

Even if your fund is not earning you huge amounts of income, it is acting to insure that you do not have to PAY huge amounts in credit card interest and it will reduce your stress levels which in turn will support your holistic-health-financial-wellbeing.

So that now when a misfortune occurs, you reach for your Emergency Fund to cover that event and then can replenish it from the source that you used to originally establish it, or perhaps from some new idea that will surface at that time.

In any case you will find yourself replenishing the fund way faster than you would have ended up paying off the credit card balance.

The satisfaction of knowing that these types of emergencies are now covered out of your own funds also generates some peace of mind and helps to lower the stress associated with those emergencies that do occur.

And this approach will produce a holistic-health-financial-wellbeing and create a greater sense of peace.