For the past decade people have been leveraging the equity in their homes for more credit.  Housing prices, and the market in general, crashed, moving the fulcrum to a point impossible to lift like a fat kid on a teeter-totter.

Currently, we are weighed down emotionally in these tough times.  Our money situation will take a huge portion of our time and thoughts, especially when the numbers are beginning to dwindle.  The mutual funds we have been nesting are plummeting, and our homes are losing value.  Is there anything safe left?

Yes, there is.  It is time to get back to the basics.  I recently wrote about getting a budget in order, and now it is time to get some leverage back into our finances.  The budget is our fulcrum, and everything is based off of that.

If you don’t have a savings account, first build a balance there.  My dad always told me to have at least enough to cover six months bills.  Even $50 dollars a month will get you there in time, just be patient.  Having this safety net will relieve loads of stress immediately.  This is a great strategy for businesses also.  I am slowly building up my business savings to reach this point as we speak.

Once I get enough there, I am going to save another three months of bills and place that money into one year CDs.  They have higher interest than normal savings, and by forgetting this money is even there will yield big interest rewards way down the road.

Now that we have built a very safe foundation to our finances we can sleep easily.  In fact, we can afford to have some fun.  My next financial move will be to invest in some stocks or aggressive mutual funds.  This is the same strategy I have employed in my own finances, and it is working wonders.  I am anxious for my business account to get there, too, one day.

Remember to reward yourself.  Once you hit a goal, treat yourself.  Six months saved, buy something from your want list.

Tweet This Post