The premise behind this money management method was being wise with your money and planning for the future. Of course, paying off debts was a top priority, but so was planning for an emergency. If you don't have an emergency fund then every little bill becomes an emergency, because you aren't prepared to handle it. That is a stressful way to live. Yes, many people have to live paycheck to paycheck, but there are probably small ways to cut back in order to set aside even five or ten dollars here and there, and those do add up over time. Or even check out tips on how to re-use and upcycle things you already own, instead of buying more. It is possible!
Another thing we learned is that there are multiple ways to plan for emergencies, where finances are concerned. Yes, you should have an emergency fund, which would be money in the bank you only touch for emergencies. However what about a death? This is where having a will comes into play as well as life insurance. Wills allow others to be able to take over your assets without waiting for a lot of court battles and red tape. It sets your loved ones up for a better financial situation in the event of a death.Not only should you create a will for yourself, but also invest in a life insurance plan. There are many places where you can get term life insurance quotes. This was the type recommended to us because in theory, if we are being responsible with our finances and putting money aside for decades, we should have enough savings by the time we are older that our savings will be build up, and no life insurance would be needed then, so term life insurance was the way to go. If you are older, then perhaps whole life insurance is the way to go, but we still had time to save and plan and prepare for our futures.
How are you planning for the future? I know some people buy canned goods and bottled water just in case we had another global pandemic, or even a war. It may be nice to have an emergency kit if this is something you worry about. Some people keep their cash under their mattress, but I advise against this method of planning personally. Everyone plans for the future different, but we could all learn a thing or two.
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