Crap happens. That's probably my #1 rule about running a small (micro) business. Crap happens.
What this means is sometimes we are forced to stop working for a few days, few weeks, or (shudder) few months.
We tear a tendon. We cut our hands. We get pneumonia. We have to have surgery. Our jobs are 100% physical. If the body doesn't work, we don't work.
Snow storms. Hurricanes. Floods. Nature may be beautiful but she ain't always helpful!
Deaths in the family. Car stolen. Aging parent takes a turn for the worse. Child gets seriously ill. Partner is seriously injured in an accident. That's the downside to loving people. When bad things happen to them, it affects you.
There are things that are simply beyond our control and may force us to have to stop working now for a period of time. Except many of us really need that steady income. We don't have another source of income at home. We have bills to pay. Mouths to feed. Obligations and expenses.
So, what do we do?
We start today (ok, you can start January 1 if you'd like) to put aside a little bit of money every single week. Maybe it's $10. Maybe it's $100. Maybe it's the equivalent of one massage. Whatever it is, you put it aside every. single. week.
Your goal? 3-6 months of savings -- that don't get touched for anything else -- as your emergency stash. This assumes, of course, that you know how much you need to bare-bones sustain yourself for 3 - 6 months. For me, that's $3,000 - $6,000.
Yes, that's a lot of money. At, say, $50 a week, that would take me 1.5 - 2.5 years to build that up. At $10 a week it would be ... longer. Lots longer.
If you've got an emergency today, it won't help that you haven't being doing this for the last year or two. But if you start today, I can virtually guarantee that you will need that money at some point. And you will want to send roses and kisses to in-the-past-you who started putting that money aside.
Three steps:
1. Decide how much money you can / want to set aside each week.
2. Put it somewhere it won't tempt you. Set up an automatic withdrawal to an out-of-state credit union maybe? Switch it to a CD when you have enough accumulated? Don't put it in the stock market. It's not an investment. It's a save-your-butt / I-need-it-right-now fund.
3. Don't touch it till you are forced to stop working unexpectedly (no, this isn't a vacation club account). If you retire without using it then (a) you are one lucky MT and (b) then you can spend it if you want (though I'll warn you, emergencies don't stop when you retire!).
