Everyone obsesses over money, right? Wrong! While I tend to think about money more than others, I still don’t WORRY about money. That’s because I have taken steps to prepare myself from ever being in a situation where I don’t have enough money to cover the expense.
Many people, including many of my friends, lose sleep over financial concerns because they would rather save a few bucks than protect themselves and their family adequately. I, obviously take a different approach and am happy that I do, because it allows me to only think about money in the positive light. Other people stress about it and ignore topics of investing as a result. I, on the other hand, embrace it with open arms because I know that I am covered. In order to approach money the same way, you should follow these two steps to prepare for an emergency. It’s not the same as the 3 steps outlined by the Huffington post, but it’s close (which tells you how valid they are).
Step 1 – Emergency Fund
The first thing that I emphasize to many of my friends is developing an emergency fund. It’s not a popular topic because it means a lot of sacrifice and forward-thinking, but it can do wonders to take away the stress when it comes to money. Have a huge car bill and wondering how you are going to pay for it? Maybe you will leave the car at the shop for two weeks until your paycheck comes in. Not with an emergency fund. It is designed to be there when you really need it. Stressful situations like not having a car are already stressful enough. Might as well prepare ahead of time so you can limit the interruptions and continue on like normal.
Step 2 – Insurance
The next thing you can do is to get the various types of insurance. This includes health, life, and renters/homeowners, among many others that I am probably leaving out at the moment. I used to skimp on not getting renters insurance because I didn’t think it was necessary, but when I realized how cheap it was and the protection that it offered, I jumped on it. Paying $100 or so each year to have almost everything in my apartment protected is a great feeling. I would hate to wake up to a fire and start to think about how much this is going to cost me to replace. Instead, I can protect myself and wife by getting out of the fire as quickly as possible and not worry about those material possessions.
The article on the Huffington post goes on to talk about estate planning. While this is important to do if you have the wealth to distribute, my wife and I are still young and building our wealth. Plus, I like to keep things simple. If you are looking to reduce the stress when it comes to the topic of money, start with these two steps. I guarantee you that it will take a lot of worries and/or concerns away.