Let’s just say you stumbled upon $5,000.00 tomorrow in a bag under a park bench. You looked around, and around, and around spinning yourself three-hundred and sixty degrees but there was no one in sight. Just you and this bag with $5,000.00 inside it. What would you do with it?
Okay so, this is probably not going to actually happen… but what if it did? Or maybe let’s say you read a book a while back that informed you, you should build a small emergency fund of say $5,000.00 cash. And lets say you realized that this $5,000.00 in cash could actually be used for something better than say sitting in an envelope in the bottom of a safe hidden in your storage area of your basement. Then what would you do? What decision would you make? Would you leave that bundle of cash just sitting there in an envelope?
Let’s now say this $5,000.00 is not a bag you found in a park but an actual envelope of money that was given to you as an inheritance. Yeah, inheritances do happen for some folks. Its both sad and AWESOME at the same time. So, what would you do then? Would you just toss it into a TFSA (Tax Free Savings Account) or maybe spend it as a down payment on a Condo, or maybe you would invest it in the stock market in 2021 on a new tech stock, or an ETF (Exchange Traded Fund)? Or maybe you would be that person whose like: Hell’s Yeah! Let’s Party This Weekend!!! Whooot Whooot!
Now… its today and you are sitting on this pile of cash. What would you do with it?
About ten years ago, I read a book about getting out of debt. Its a book by Dave Ramsay and inside that book Step 3 or 4, is to build an emergency fund. Its to be worth the same amount as 1-months Salary. And you stuff it in your closet. Its there “in case of an emergency”. Like your truck gets in an accident and you have to pay for a new bumper. Or your water heater blows out and you have to replace it. Or you break your leg skiing and your going to be out of work for a few weeks. This is when you pull out that good old emergency cash and spend it. But as soon as you spend any amount of it, you are to replace it immediately.
Now… lets say you live in a rented condo or house. Let’s say none of those things is really going to affect your life. Let’s say you have followed all those steps and your now sitting pretty because you followed that 12-step program and you are now debt free! You have finished the Total Money Makeover and are on your way to building a wealthy future for you and your family.
What would you do with that $5,000.00 ?
~ James Curtis