This is a revision to the original article for “What is your financial lifeline?“
I can’t believe 2 years after writing this article, the importance of having a financial lifeline is more important than ever now. With the world suffering from the hands of COVID-19. Many jobs were lost and people are struggling to make ends meet.
I am fortunate to have an income stream online, so this pandemic didn’t affect me that much financially. But I am seeing those around me who are affected.
For example, my aunt is now living on unemployment and collecting roughly $1,900.00 per month. Living in San Francisco, that’s not even enough to pay rent. Luckily for her, she had money saved up, so she had access to her emergency fund.
According to GoFundingRates.com, their survey shows 45% of their respondents have $0.00 in their savings account and 24% have less than $1,000.00 in their savings. Sure it’s probably not a large enough sample size. But it gives a pretty good idea of where most of us are financially.
So if you are among that group, this might be a good time to create an emergency fund for you and your family.
What Is An Emergency Fund
An emergency fund is the money that you’ve placed aside for unexpected expenses. The amount of money that you should place aside varies from person to person because we don’t earn the exact amount as each other.— Your emergency fund should be enough to cover around six months worth of living expenses.
An emergency fund will also give you peace of mind because you know no matter what happens, you’re confident that you have the funds to take care of it.
The What If’s In Life
- What happens if someone you love gets injured or very sick? Would you be able to afford their medical care?
- What happens if you get fired from your job?
- What happens if your car gets totaled?
- What happens if your car breaks down? Can you afford to pay for the repairs?
- What happens if your job gets replaced by robots?
- What happens if you get injured or died at work?
- What happens if you owe a lot of money for taxes this year?
- What if your home insurance denies coverage because your house needs some repair? Can you afford that?
- You see, the what-ifs can happen to anyone. It doesn’t mean it will, but there’s always a possibility. Why do you think we purchase food supplies when there’s a forecast of natural disasters?
The things that are guaranteed to happen is your monthly statement for utility bills, mortgage, rent, car payment(s), gas, insurance, and food. No matter what happens in your life (besides the end of the world), your expenses will still come in.
How To Start An Emergency Fund
You don’t want to accumulate more debt via credit cards or digging into your retirement funds. What you want to do is quite simple… the answer is in the question.— Start An Emergency Fund.
Trust me, any form of savings is going to put you ahead of the average American. Most Americans have less than $1,000.00 in their savings account. If their car breaks down.. it is very likely to break their bank as well.
Simple Steps To Start An Emergency Fund:
- Calculate all of your expenses: Utility Bills, Car Payments, Mortgage/Rent, Recreational, Food, Gas, etc.
- Multiply that total number by 6. The resulting number is your 6 months of living expenses that you should place aside.
- Open a high-yield savings account. I’ve tried using a personal checking and savings account, but I always find myself digging into my emergency funds because it was so convenient.
That’s the typical way to start an emergency fund and there’s nothing wrong with that. However, there is a huge flaw to this method when it comes to working a regular job.— If you’re starting an emergency fund now, you’re not likely to have six months worth of savings right away.
Here comes the what ifs again…
What if you’re in the process of starting an emergency fund and the what-ifs happen?
How To Have Unlimited Emergency Funds
When you have a regular 9 to 5 job. You get paid when you show up to your job and do your required work. Your financial lifeline depends on you and it stops if you’re not able to go to work for whatever reason.
This is why people are now leveraging the internet, to create systems that work for them, so they can live life. It does sound very skeptical at first because growing up, nobody told us it was possible.
The key to having unlimited emergency funds is by having multiple streams of income. When it comes to your regular brick and mortar business, it can be very difficult to manage multiple businesses at once.— I’m not saying it can’t be done, but it does require more effort and money to start.
The power of the internet has enabled people to create multiple streams of income with very low upkeep cost and less effort. Keep in mind, it still requires effort, just not as much as a regular brick and mortar business.
Here’s an example: You can make money by running a blog or a website. Most bloggers monetize by using Google AdSense, but that’s not ideal unless you have lots of web traffic.
There are people who monetize their blog through affiliate marketing. This is a little more complex compared to blogging, placing Google Ads, and letting Google do the work for you.— The rewards from affiliate marketing is far greater!
There are 3 types of Affiliate programs which I explained in another article. You can check it out by clicking here.
A blogger or website owner can earn an income from multiple affiliate programs. You can get paid on a monthly basis, per sale (a few dollars, up to thousands of dollars).— If you’re unable to work at a physical location, that’s okay because the internet is working for you 24/7.
What I really enjoy earning is from continuity affiliate programs that pay me every single month. Regardless of what happens to me… I can be sick in bed, traveling, sleeping, or doing absolutely nothing.— The money will still come in from those programs as long as my referrals continue to pay for their membership.
The key to continuity programs is by promoting things that offer value to your readers. That’s why I would never promote a product that offers no value just to earn a quick buck.— My success depends on the success of my readers.
Starting An Affiliate Marketing Business
Here in Smart Affiliate Hub, I go over primarily affiliate marketing. So if you are interested in starting a blog for affiliate marketing. Please check out my course here. The course is pretty easy to follow with step-by-step hand holding instructions.
But before you get started, I want to mention that most of the recommended services in my course are either free or comes with free trials. You are not required to use everything that I recommend. There are alternatives out there.
And lastly, financial success does not guarantee success. No one can tell you their results are typical. Your success depends on you.
I hope this was helpful! We are living in uneasy times right now, but we will persevere. If you have any questions, please let me know in the comment section down below and I will try my best to help you out!