How to Stop Living Paycheck to Paycheck & Build Your First Emergency Fund | 82

0:00 OK, so you know that feeling when payday hits and everything's already been spoken for? So whether that's your rent and your mortgage, groceries, gas, those survival mode items, before you can even blink, it's gone. So if you've been stuck in survival mode lately, this episode is your road map to stop that panic cycle and start rebuilding financial stability. So I want you to know you are not alone. Most families are one unexpected bill away from a huge amount of stress. So today I will show you how to move from barely hanging on to confidently setting aside your first emergency fund without feeling like you're sacrificing everything to make it happen.

0:41 Hey there, I'm Jules the budget nerd, and welcome to the Debt Rebel Show. This is the place where working families like yours learn how to stop living paycheck to paycheck, crush debt for good, and build a life where money actually works for your family. In about 15 minutes, I'll share practical family budgeting tips, tough love strategies, and actionable steps to move toward debt free living without the fluff, the shame, or the confusion. And I know a thing or two about this. My family and I have eliminated over $107,000 in consumer debt and that was after I got my degree in Economics.

1:16 So stay tuned. This is going to be a great episode. So grab that coffee, your planner, whatever you need to make this a great experience. Maybe a snack if you're like me. And let's make your money work for your family. All right, so if you got a chance to listen to the last episode of the show, I talked about what happens when your income is uncertain. So in specific reference to the US government shutdown, as I'm recording this, it's still happening. So it's on a day-to-day basis, but a lot of families are shifting into survival mode for their spending.

1:50 And so that's what that episode is about. And I want to talk about that today. But what do you do after your income returns or you want to create that financial stability for yourself? So when this situation comes up, it might look a little bit different next time you are prepared. What survival mode looks like is just being reactionary, living paycheck to paycheck and having no margin for error. So when things come up, you are putting him on a credit card, you are having to move money around, maybe balance transfers on credit cards, that kind of stuff.

2:24 You're constantly in that fight or flight financial mode. So I want to say I have been there before. And I also want to talk about what it looks like on an emotional and practical side because sometimes we can just think this is the normal thing, everyone does it. And I want to, I want to challenge that belief and that thought because just because other people are doing it doesn't make it right for us or for our families. Some kind of things to be thinking about, and I know I've been in this place before, is checking our bank accounts before we ever make a purchase.

2:59 I remember one time I had checked the bank account, it was payday and went grocery shopping and got up to the check stand and swiped my card and it wasn't happening. It was super embarrassing but I checked my account and before we left and didn't realize that something else was had already beat its way there and so it was. Not only was it really embarrassing, but I had a cart full of food. It's not like I was trying to plan this amazing all inclusive trip to Mexico with my family. I was trying to feed my family.

3:30 It was a really unfortunate situation. And so also maybe pulling up to the gas pump and you're like, all right, let's hope I can fill this thing up so you can get out of there and still actually be able to pay for it, right? So all of those things are, I want quote UN quote normal, but it's also when we are just completely maxed out, when you're maxed out financially, it does spill over in other areas. And so it doesn't allow you to show up and be the best parent or the best spouse, maybe the best team member, maybe the best employee.

4:02 It spills over in other areas. And there's a reason why I want you to know that there is a way out. And now that you have experienced the survival mode budget and you've put that into place, which is the golden ticket for helping you create this emergency fund is staying in that a little bit longer. So if you listen to that last episode, you created that the necessary expenses, so roof over your head, food in your belly, in your family's bellies, and then the necessities like medical and transportation to and from work, those things are covered.

4:37 Everything else can stay paused until you get that emergency fund set up. And that really is the key. There's some other things we'll talk about too that you can add in there. I have those also in my free Debt Rebel starter kit that you can get on my website. But this will help you create that buffer for yourself so that when unexpected things in life come up, you can say it's OK, I have an emergency fund. And also things change a little bit when you have that emergency fund. And I'll talk about that more in a little bit here.

5:06 But the one thing I want to encourage you is you're coming out of survival mode. If we stay within that survival mode budget for just a little bit longer, that's going to help set us up for financial success in the future. All right, so I want to talk about the OK, so your income has come back. You are getting your regular paycheck again, and it's super easy when you're coming out of that survival mode time is to go back to your old spending habits. And I really want to encourage you to stay within that for just a little bit because this is where you can create the massive progress in creating that emergency fund.

5:43 It's not time to, you know, go splurge and go buy, you know, go buy that TV that you really wanted. We're going to watch the TV that we have and we're going to build this margin for ourselves and for our families. One thing that I think sometimes people, this is a common conversation that I have, is that they'll create an emergency fund when their debt is paid off. So I think that's a misnomer. We don't need to be debt free to build an emergency fund. And I would actually say this is the priority for you.

6:12 If you're thinking about being debt free at all or eliminating the amount that you use your credit cards, It's the very first step that my family and I took when we were getting out of our debt. When we were eliminated, $107,000 of our own debt was we made $1000 emergency fund. Typically $1000 is going to cover these these things that pop up in life. And so that's a great place, great place to start. So how do you do it? First off, when you're creating your budget, put that in there. Put that as a line item in your budget and prioritize this along with your survival mode expenses, those transportation to and from work, your mortgage and utilities and food and then put emergency fund in there.

6:56 Now, this will help you make it a priority. So let's break this down into some actionable steps right now. Remember, this isn't for your forever emergency fund. This is to help you get out of that fight or flight mode when it comes to your finances. It's the it's the panic. It's stop the panic button. It is the piece that you need so that you can eliminate that debt and you can create a little bit of a margin for yourself and your family. Now the other thing is for myself, this was very important is keep it separate from the rest of your finances.

7:30 So maybe it's at a different financial institution. It absolutely needs to be separate from your regular checking. It could be at the same financial institution. I found it's much easier to have it separate so that I'm not just, you know, making these quick transfers to it. You want to have access to it so that you can get to it within an hour. So if it's something you need to go to an ATM or something like that, or you can pop into the bank to get the cash. But if it's out of sight, it's out of swipe.

7:58 And so you want to make sure that it's accessible, but not right there so that you can just make those make those transfers from that account to your checking when stuff comes up that might not constitute a true emergency. So now that's the other thing is protecting it and making sure that defining what an emergency is. So if you're managing your finances with another person, talk with this other person about what what an emergency looks like for you. Now I love a fantastic deal and especially I love a great deal on shoes and especially right now kids shoes because all my stars and they grow out of them so fast.

8:37 But that is not an emergency. An emergency is I got a flat tire and I need to be able to get to and from work. An emergency is my sink is leaking and I need to call a plumber and have someone come fix it. Those types of things coming to an agreement on what a true emergency is. And that's where having that outside accountability is very helpful because we're not going to say, you know what, I don't feel like cooking tonight. And so that that counts as an emergency rate. So I'm going to go get take out.

9:05 So when you're in this, when you're in this season, staying focused and deciding ahead of time what an emergency, what constitutes an emergency will help you stay in line with what matters and aligns with what matters most to you and your family. The other thing is if your income is back is setting up a regular transfer on every payday, even if it is just $25, that's going to be a separate line item in your in your put a little bit towards it every single pay period and then celebrate. So one thing I love doing is I love celebrating with the members of the Alliance coaching program is these small wins.

9:37 It might feel like, Oh my gosh, I only put $100 in my emergency fund this month, but that's so huge. OK, let's celebrate that together. Send me a voice note. I'd love to celebrate with you on the show. I'll leave that link in the show notes as well. But every single bit celebrate, celebrate that because that is a deposit into your family's financial future and it's going to bring you Peace of Mind long term. Now, when I say celebrate, I say don't go out and buy something that's not don't do that as a celebration, but share it with someone.

10:09 Have a little celebration for yourself and acknowledge that that is a step in the right direction. And another one that I have found it was very helpful for us is we started to is to go through our home and get rid of things that didn't bring value to our home anymore. And this one's a great way to make some additional progress towards your emergency fund. So we had one listener. If you check out episode 19, this is how she created. It helped create her emergency fund. She found $1900 from going through the Debt Rebel Starter Kit and really focusing in on the things that weren't bringing value to her family's life anymore.

10:46 So not only did she come up with her $1000 emergency fund, but also helped get her debt snowball going. And you can grab that Debt Rebel Starter Kit. It's available on my website, jewelsthebudgetnerd.com/starter Kit. JEWLZ, the Budget nerd.com/starterkit, it's totally free and it's going to give you a bunch of ideas on how to create some margin in your budget so that you can put that towards your emergency fund. Because we have a lot of money that's hiding right in front of our face, OK? So remember when we have a small emergency fund in place, even if it, you know, 500 or $1000, we stop living in that fight or flight mode and that is where we can breathe easier and we can make decisions with confidence instead of that fearful mode.

11:34 It's also going to protect your family. It's going to protect your Peace of Mind and it's going to break that paycheck to paycheck cycle. And that's what this show is all about is helping you line align your finance so it matter. It matches that you're spending matches what matters most to you and your family and breaking that dreaded paycheck to paycheck cycle. So this is your this is your ticket. This is the golden ticket. Create not emergency fund. So I wanted to send a personal invite. If you have been listening to the show for a little bit and you've heard about the alliance coaching program.

12:06 We are now enrolling and so I would love to have you join us for that additional accountability. But there's also all of the previous workshops that I've done and the teachings and you can get those all on demand, but also you get monthly coaching from myself and you can learn more about that on my website as well. All right, Rebel. So to wrap up today, I would love to know what your action step is going to be for today from listening to this episode. Are you going to grab that debt Ripple starter kit and get to work on it?

12:37 If you do, please send me a voice note and let me know. And let me know which one of those items you took some action on, whether it was calling your credit card company and asking for a lower interest rate or maybe it is just meal planning. But grab that Debt Rebel starter kit. It's going to give you a bunch of other ways. And so you can get to that $1000 faster and eliminate that debt even faster. All right, thank you so much for listening and we'll talk soon. Thank you for tuning into the Debt Rebel show today.

13:04 Ready to take your family budgeting to the next level? Stop that paycheck to paycheck grind and start living debt free. Head over to my website, debtrebelpodcast.com. That's DEBT REDEL podcast.com to grab resources, tools and tips to make it happen. And don't forget, subscribe, leave a review. And if you know another family that will love hearing today's episode, it would be such a gift for both of us, your friend and me. If you share this episode and remember your debt free life starts with one brave step and I'm cheering you on every step of the way.

13:43 We'll talk soon. Debt Rebel.