No Limits Ladies.com

If we do not plant knowledge when young, it will give us no shade when we are old.

-Lord Chesterfield

First thing to go when I experienced my financial emergency, was my emergency fund. And boy did it go fast. After my head stopped spinning, I got to thinking about three things:

1. I was so glad I had an emergency fund. (If you missed it, check out Kimber's practical guide to emergency accounts.)

2. I could kick myself for it not being bigger.

3. It was gone- now what? What could I sell or how could I make money quickly?

Once my emergency fund was gone, I turned my attention to freeing up money I had tied up in assets I felt could be liquidated quickly. For me, I chose a secured line of credit that happened to be swtiching over, releasing my money back, and an vehicle I could sell to pull my cash back out of.

For me, this is the most important question when it comes to preparing for financial emergencies:

How can I make money quickly?

The bottom line is that an emergency fund and plan are only there to act as a cushion...where will you be once the cushion deflates? This week we have looked at emergency funds that can vanish before your eyes, assets that can be liquidated, usually for less than you think they are worth, and now we ask, can you make money quickly?

Earlier this week, Start Up Princess had an amazing list, that included several things you can do to make money quickly. I did several of these things myself.

I'm big on selling things. If it isn't nailed down, when I need cash, it's on Craigslist and sold! (Excluding my kids and soul...)

Don't worry about getting top dollar; remember, a bird in the hand is better than two in the bush.
Sell whatever can make the most money and be replaced. Just get through it and get some traction.

What else can you do to make money quickly? Stop spending it. Everything you don't spend, is money you earned. This would seem obvious, but if you are like me, you may have some bad habits that die hard (remember the whole denial thing?)

What else? What skills? What jobs? If we can swallow our pride, and just focus on getting back in the game, the world opens up and rewards us.

Thought I’d pipe in on E’s series on having a financial safety net.

Currently the hubby and I have what we call an emergency house fund. The amount that we decided on was the largest expense we could think of for the house, that is the replacement of the roof. This amount is placed in a money market fund.

We also have a car fund for the replacement of our rather old car. Again, invested in a low risk (but low reward) money market fund. I’m not expecting any great return on my emergency fund.

But before we were as financially stable as we are now (and had the mortgage paid off), we had a home equity line of credit (HELOC) available for a year’s take home salary for one of us (we’ve always lived off one salary, investing the other).

This HELOC was applied for BEFORE any emergencies. It is more difficult (if not impossible) to obtain a HELOC when out of work so never wait until then to obtain one.

(Right now, the HELOC is used for investment purposes. Note: this was only done after having a track record of returns beating the interest rate charged on the HELOC. Plus for an extra level of safety, the interest charged can be covered by our other income.)

The emergency funds is the last source of money we dip into. I don’t even include it in our net worth calculations. In the decade, we have been married, we have been fortunate never to have done so.

Generally, when there is an emergency, we have alarms in place to let us know: the siren of a fire truck, a fire alarm, etc. We have trained ourselves to know how to respond to these kinds of alarms.

What about financial emergencies?

While we may see the cause of the emergency, the loss of a job, an illness, an unexpected disaster, it is much more difficult for us to understand how these instances may actually play out and the chain of reaction that will be set in motion.

Maybe we have to go into denial to survive and just keep putting one foot in front of the other? Maybe we have to pretend it will all be back to the way it was soon. But that path no longer exists in many circumstances- life has forced us off the beaten path we know, and into the great unknown.

How can you know? How can you see when you are in denial? Is it possible to hear the warning alarms in our heads and train ourselves to respond, the way we did as children during fire drills at school?

I believe we can prepare ourselves. As I work my way through a financial emergency, I can tell you that the one piece of advice, the one saying that has gotten me through is this:

Eat the bunny early.

The bunny story, some of you may remember, was one a former pilot friend of mine told about survival training he had done. They were given a bunny one week prior to training, to care for. They were then instructed to take the bunny with them as they were dropped in the wilderness to survive for a week. Some of the pilots did everything they could to spare the poor bunny's life, only to end up giving in when they were desperate and weak.

The lesson? Eat the bunny early. Identify the situation and realize you will need to keep your wits and strength up to make it through. When you find yourself in an alarming situation, learn to identify, and not deny. Then step into action. Put your emergency plan into play. Keep yourself financially afloat, so you do not find yourself making poor decisions based on waiting to the last minute, and acting out of desperation.

Easier said than done, I agree. As I reflect back over what I did and what I would like to do differently, I hope you will also evaluate your own emergency plans.

My husband, Matthew Anderson of Wholesale Works and I are both entrepreneurs and we have learned a lot from our ups and downs over the past 10 years. We had a period of about 3 years where we were really just living day-to-day...hardly any money to buy gas or pay our bills. It was very stressful times, I remember having a tantrum because I didn’t have $8 for diapers and had to borrow from friends and asking them to lend us clothes for my kids. Right now things are going great, but you never know...you always have to be prepared. This is how we keep our sanity during the stormy times:

* Food Storage is a MUST! We have a well-stocked pantry and freezer at all times. We regularly rotate through our pantry and have up to 1 year supply of food we can rely on and replace as we eat it up. We also keep extra supplies we use regularly like personal hygiene items, trash bags, cleaning products, ziplock bags, etc.
* Pay Bills Ahead! When we have extra cash, we pay our mortgage ahead, phone bills, utility, etc. we do better to pay ahead than to stick it into our savings and it gives us peace of mind for rainy days
* Find a Great Consignment Shop! We have saved thousands of dollars by shopping consignment over the years for our clothing...I can find great stylish clothes for our whole family and then I don’t get so upset when my kids ruin them!
* Eat Simply: Go out to dinner for birthdays and anniversaries, but other than that...brown bag it and stay home as much as you can for meals, you’ll save a lot that way. Learn to cook “with what you have on hand” in the fridge and freezer, get creative, google the ingredients you have and see what innovative recipes you find
* Trade/Barter: This has also been a big life saver for our family!! We are currently trading a home theatre for landscaping; the possibilities are endless!
* Priceline for Travel: we use http://www.biddingfortravel.com forum to help us get great deals; we stayed at Disneyland Hyatt for $23 a night! ;)
* Ask for Help from Relatives: Most of them time they won’t charge you for babysitting, help with projects, etc.! And it’s important to serve them back in return too!
* Get Connected! We get free concert tickets from our friend at a radio station, free samples from companies, offer to review products, books, etc. and publish on your website
* Co-Market with other companies to save on expenses, a booth at a tradeshow
* Learn Basic Natural Healthcare principles/tips to cure yourself and your family with herbs and remedies when possible; keep supplies on hand at all times
* Go to the Library/requests books to be purchased at your local library!
* Pawn Shops!! This sounds really ghetto but we buy a lot of our DVDs and CDs there!
* & When you’re really broke...sell stuff on eBay or have a garage sale! One summer I had 4 garage sales at different friends houses around the city and it helped us to pay our gas/basic expenses
* Stash Cash in a secret place (like your sock drawer)!! Use it only for mad money like to get something you desperately want, like Ben & Jerry’s! :)
* Suggest that you hang out with friends at home, play games, make cookies, have a BBQ.
* Get creative with gift-giving, make a music compilation and burn to CDs, write a family history, create a piece of art...
* Write 5 things you’re grateful for EVERY single day, because no matter how hard it is, there is always something great to be happy about...even if its your child’s smile or a pretty flower in your yard.
* Give of your time and resources to others in need when you are financially strapped because as you do, you will feel that you are indeed contributing and you’ll feel great! It will take the focus off your problems.

Make a Wish, Make it Happen,
Kelly King Anderson
Start Up Princess

This next week on No Limits Ladies, I'll be doing a series called "In Case of Emergency...", about (you guessed it) emergency funds and things you can do to prepare, or what you can do today if you find yourself between a financial rock and a hard place.

If you have any stories or posts on your experiences with emergency funds, lack thereof, or great planning you had, please feel free to share them!

Kimber will also be holding down the fort with her More Money Mondays, and fun filled financial posts leading up to Frugal Fridays!

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