Yesterday I saw these words on Facebook. As a financial coach it resonated with me and I want to share with you why.
Because of the economic shut down many people are losing their jobs. Their source of income is running dry and many do not have the necessary savings to withstand an economic shut down for much longer. As I write this I wonder how you the reader are doing. How are you financially? Have you lost your job? I pray that you haven’t.
The words in the post say that people live paycheck to paycheck, and that is correct. Statistics tell us that 8 out of 10 live that way. You can read about that here. Since that is the case, it is understandable why many Americans are hurting now—why many Americans fear what will happen to them if this economic meltdown continues for much longer. This is the reason budgeting and planning for rainy days is of paramount importance.
Imagine how you would feel if you had a six month emergency fund in place during this time? Six months from today would be September 26. If you had enough money to pay your bills until then, would you worry about this virus as much as you do now? That kind of financial security during these times would bode well. There are people who have that kind of emergency fund. It’s what I teach people to do. Now we can see the importance of it.
That being said, let’s consider these billion dollar corporations getting these bail out monies. Why do these companies not have a six month emergency fund? Why don’t these companies think about a rainy day? Now it’s not like they are getting free money. I don’t know the conditions for these bailouts, but the last bailouts where actual loans they had to repay. It wasn't free money. If that is the case then let them borrow the money and pay it back.
However, having to borrow money is indicative of a badly run company. Why can’t these companies have a six month emergency fund? If I were running the show, I’d let them fail. We the tax payer can’t be bailing poorly run companies every ten years. But what about all the job losses? That is the part that tugs at my heart strings. Nevertheless, innocent people constantly deal with the poor decisions of others.
If a parent goes bankrupt and loses the house, the children who had no fault are affected. I truly believe if we let more of these big companies fail, others will learn to not make the same mistakes. And even if there is bailout money, it should go to the employees. Furthermore, a company that fails can be bought out by others that haven’t.
Think about this—why doesn’t Apple need a bailout? Their stores are closed and their production factories closed for months in China. They don’t need a bailout because they have cash reserves. If we keep bailing companies out every ten years they get use to it. Let them save their own money to provide their own bail outs. Let’s treat them like we do individuals.
However, more importantly let us prepare for the next catastrophe and have an emergency fund. It can't be done!
If you have questions don’t hesitate to ask here. Take charge of your money!
Your biggest cheerleader on social media,
P.S. Day 280 please pray for the 7.2 million goal for 2020