You may hear terms such as Emergency Fund, Rainy Day Fund or some other similar variation. What do those terms really mean? Some financial professionals will tell you it is part of your savings plan. It can be referred to as a savings bucket. The concept is similar to that of making categories of your income or expenses.
Income category examples might include employment income, sales income, investment income, reimbursement income and income from royalties. Examples of expense categories could include office supply expense, education expense, meals or grocery expense, and marketing.
Creating categories or buckets helps us better organize how we view our income and expenses. When it comes to our savings we tend to think of it as one big bucket to dump all of our future spending. The danger of not creating a flexible plan for future spending can lead to not having money available when we need it. Savings can become too restrictive and not ready for you to use or savings can become the victim of over spending and no longer able to serve you.
Savings buckets can include minor emergencies, long-term emergencies, reward savings, vacations, and retirement. Creating a balanced view of savings will give you a feeling of relief and end feelings of resistance to save or feelings of resistance to spend.
Kevin Smith delivers on helping his clients build a balanced view of their short-term and long-term spending plan for their savings. Get started on a balanced plan to spend into savings and spend out of savings right Now! Kevin Smith will get you ready for when unexpected emergencies come. Contact Kevin Smith TODAY!