Scenario: I can’t save any cash in my current scenario. How do I go from spending everything I make to saving? Its feels impossible.

What I’d do:

I know there is a point in your financial journey where everything starts to freeze up. In these situations, it’s important to have faith that you can make a change and lean into the budgeting process. Here are the steps I’d take:

1. Stop using credit cards until I can control my spending.

2. Start using YNAB to track your spending.

3. Assign jobs to your current dollars.

4. Evaluate your spending against your goals.

5. If the goal is saving, then stop all spending that doesn’t align to your goal.

You’re right, YOLO, but the name of the game in your personal finances is liquidity.

In other words, how quickly you can obtain cash if needed.

If you can’t quickly get cash without touching investments then your cash flow locks up and you look to debt.

Using debt to fund your day to day expenses when you don’t have liquidity is a bad financial habit.

So yes, whether its one month or six months, you do need some extra cash on the sidelines to keep your financial situation secure!

If you don’t yet have an emergency fund, aim for saving $1,000. Then move to 1 month of your bills. Then increase your savings however it works for you!

What is a chiropractor’s favorite music?

Hip Pop.