Welcome to February.
This month on the blog we will be talking about financial preparedness. When our blog team met in January to pick a theme, this had been heavy on my heart for a while. With my own experiences over the past two years and from the comments you all have shared here on the blog in the time I’ve been editor, I know that this is a topic that will benefit many of you.
Before I jump in to preparing financially I want to share something important. I do not believe that the Lord ever intends for us to live in fear. So when we talk about being prepared I do not mean to live in fear of job loss, layoff, cuts, etc. There is a distinct difference between being wise with our finances and acting out of fear.
Proverbs 21:20 says: the wise have wealth and luxury, but fools spend whatever they get.
I shared previously that I had to leave a job quickly for moral reasons. As a single, early 30s, working woman this was a tough spot to be in. Do I give up my income to save my integrity? Is it smart to quit without another job? As Christians we don’t always get to do what the world deems smart and for me, in this case, it was the right decision. However, I was at an advantage because I had been preparing financially. It took me 3 months to find the right next job, but I was able to make it work because I had a solid financial foundation.
One year later, in the midst of Corona – I was facing a layoff. I’ll admit, there was some fear. Didn’t I JUST do this? I prayed and the Lord quickly came to my rescue with my current job. However, in that year, I had replaced all the money so if I’d needed to be unemployed again, I could have.
These are difficult times. This economy and job market are more complicated than they have been in a long time. We need to be wise. What can you be doing right now to prepare for whatever 2021 holds for you?
- Dump debt. I cannot say enough how much freedom there is in being debt free. Now is a great time to buckle down and pay off. The less money you owe, the less income you’re forced to bring in every month. Also, if you have to go without income or take a pay cut, owing less money will make a huge difference in your ability to do that successfully.
- Cut costs where you can. When I was trying to get debt free I cut cable for example. It saved me nearly $100 a month that I used to pay off a car, school, a credit card, and eventually my home. By the time I paid off the debt, I didn’t even want it back. Not going to the gym because of Covid? Cut your membership. Monthly subscriptions like Hulu and Netflix? Another way to cut cost and start putting away for a ‘rainy day.’
- Make an emergency fund. If you don’t have one, you need one. If you have one, this might be the right time to consider increasing it. When I took Dave Ramsey’s Financial Peace, they recommended $1000 until you’re debt free and 3-6 months of living expenses once you’re out of debt. I think a compelling argument could be made present day for the higher end of these. Figure out your monthly costs and prepare in case you need to pay them from savings.
- Boost your HSA. When I was unemployed I had to pay my health costs out of pocket. Thankfully, when my job situation started to go south I dumped money into my HSA to cover the lapse. When I was reemployed, I focused on replenishing that money quickly. When I changed jobs (again) thanks to Corona – I had more than enough saved to cover until my new insurance picked up at 90 days.
- Side hustle. If you have skills and time that could be used to make extra money – this is a great time! This money can be used to boost your savings, pay off debt, and may make any unemployed time more feasible because you’re still bringing in money.
A few final words of encouragement. No one can change the past. Don’t beat yourself up for missed time or opportunities. It’s never too late to begin making good financial choices. At any age or time in your career, you can make impactful changes for a better future. The Lord is ultimately in control and He provides. I have experienced his provision so tangibly in my life and especially these past few years. Trust, believe, pray, and purpose to be wise.
Also, stay tuned all month for more financial preparedness advice here on the Crossroads Career blog.
Becca Christensen is a Crossroads Career Board Member and the editor of this blog since 2020. She recently moved into accounting within the automotive industry. She’s an avid reader, an enthusiastic football fan, and competitive at any and all board games.