We’ve all made personal finance decisions that we later regretted. How many times have you said, “… if I had only known then what I know now, everything would be different …”
About twenty years ago I sold my electric guitar. I hated to part with it but I needed the money to pay bills. I also felt that someday I would be able to replace it. I knew the guitar was a collectible when I sold it.
The buyer paid me nine hundred dollars, which was a lot of money back then. Today that same guitar is worth more than ten-thousand dollars!
Do I regret my decision? Absolutely! The choice to sell was made out of quiet desperation because I had no savings and I was doing a very good job of personal finance mismanagement.
That guitar was very special to me. Not only did I enjoy playing it, I felt the pride of ownership and a sense of accomplishment in having purchased a vintage collectible instrument at a bargain basement price.
Having to part with something I truly loved because of poor financial planning was a real tough lesson. But it’s a real clear illustration of what happens when you live beyond your means and don’t have money set aside in an emergency fund. Sometimes the things we choose to give up are irreplaceable.
As you are thinking about this story, ask yourself what you might be faced with giving up if something unexpected were to happen.
• If your company was sold and your job was eliminated, how would that affect your family’s personal finance picture?
• Imagine for a moment that you needed to buy a new car and had to finance the entire purchase, how would you be able to make the monthly payments?
Having money in an emergency fund is frequently the only way to weather some of life’s personal finance ‘hurricanes’. We can’t predict exactly when and where the storm will hit, but we can survive the damage without too much trauma.
As we make our way into 2008, make it a financial planning priority to put at least five percent of your paycheck into an emergency fund. It could help prevent you from having to give up some things that are truly irreplaceable.
See you in a few days ….
Own the power of your personal finances and retire a millionaire!
Marc Woolf
Blog Posts Copyright © Marc S. Woolf 2007 All rights reserved.
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