Building An Emergency Fund

Seeing companies like Party City and Big Lots shut their doors around the holidays is tough. This isn’t just about one company—it’s a signal of the broader financial challenges businesses and consumers are facing. Party City filed for Chapter 11 earlier this year, and we’re seeing other companies follow suit, struggling to stay afloat in this economy. It’s another reminder why having an emergency fund, a plan, and a handle on your money is so critical—no matter your income level. Even if saving 3–6 months of expenses feels out of reach, start small. Having just 1 month of expenses saved can make all the difference when life takes a turn. Some savings is better than none, and it compounds over time. Right now, over 14,000 people are without jobs during the holidays in one of the most turbulent U.S. economies we’ve seen. Inflation, shifting consumer spending, and rising costs have companies under pressure, and layoffs are becoming an unfortunate trend. If you don’t have an emergency fund yet, here’s how to start: * Open a High-Yield Savings Account (HYSA)—it takes minutes. Highly recommend Ally. * Set up auto-transfers of $10, $20, or $50 from each paycheck (based upon your cash flow/budget). But don’t stop there. Don’t just save—create an emergency plan for how you’ll handle financial disruptions. It’s like an SOP for that emergency— in case of “x”, I will do “y”. I’ve been there. I remember getting laid off while earning $10.71/hour, with just two weekends of severance. No kids, no emergency fund—it was a wake-up call. I remember seeing the signs when the earnings didn’t pan to forecast and share prices dropped rapidly fast! The layoffs we’ve seen this year are likely just the beginning. With ongoing inflation, shaky consumer spending, and economic uncertainty heading into 2025, my concern is that more companies will face financial struggles. This isn’t about fear—it’s about preparation. I have a saying, plan it — don’t panic. Even if you notice your employer start to sway with operations, make sure your own internal operations is fine. Start building your safety net, no matter how small. #personalfinance #economy #business

Emergency Funds: Not If, But When You'll Need Them…. Think of your emergency fund as your financial life jacket. It’s there to keep you afloat when the waters get rough—not just a nice to have, but a total must. This isn’t just any pool of money. It’s your safety net, your peace of mind. Here’s why you need it: 🌊 Life's Surprises: → Job surprises, unexpected bills, or sudden repairs? → This fund keeps those from knocking your life off course. 🌊 How Much?: → Aim to stash away at least 3-6 months of your living costs. → We’re talking rent, groceries, bills—all the essentials to get you through without a paycheck. 🌊 Where to Park It: → Keep it accessible but growing. → Think high-yield savings accounts where you can grab it without a penalty but still earn a bit on the side. 🌊 Starting Out: → Begin small if that’s what works. → Set up a little auto-transfer from each paycheck—trust me, it adds up. 🌊 Keep It Updated: → Life changes, so should your fund. Got a raise? Maybe you moved? → Check in on your fund yearly to make sure it still fits your life. It’s not about if you'll need it—more like when. And when that time comes, you’ll pat yourself on the back for being so prepared. Got questions on starting yours or how much you should save? Drop them below. 👇

The New Rules of Personal Finance in an Age of Job Uncertainty Most of my clients are between 35 and 50. Senior corporate professionals — some in India, many NRIs across the US, UK, Germany, Japan, Singapore, and the Middle East. High earners who have, by conventional yardsticks, done everything right. I recently asked them: what is the biggest source of chronic stress in your life? The most common answer was not health. Not relationships. It was: "I may lose my job in the coming months or years." The second: "I am not sure if I am financially prepared for my children's education." These are not irrational fears. Mid-career job displacement is a real and growing risk. The question is what to do about it. 1. Reduce debt aggressively. A home loan that feels manageable on a stable salary becomes a crushing liability the month that salary stops. Reducing fixed monthly obligations lowers the floor of what you need to survive — and that floor matters enormously during a career transition. 2. Extend your emergency fund from months to years. For a senior professional in a specialised role, finding equivalent employment can take twelve to eighteen months. Keep this money in liquid instruments. Liquidity is not laziness — at this stage of life, it is strategy. 3. Ring-fence your children's education corpus. Education timelines are fixed. Your child's admission does not wait for markets to recover. Move this corpus into a dedicated, separate allocation and treat it as untouchable. 4. Do not over-lock money in the name of tax saving. Aggressive investment in NPS or long-tenure ULIPs can silently erode your liquid net worth. Optimise for tax — but never at the expense of financial flexibility. 5. Right-size your insurance. Most people take a term cover in their late twenties and never revisit it. Review your sum assured. And if your health insurance is entirely employer-provided, get an individual policy — that cover disappears the day your job does. The professionals who will navigate this era with the least anxiety are not those who earn the most. They are those who have structured their finances so that a career interruption does not cascade into a financial crisis. That is entirely within your control.

Here’s exactly what we’re telling clients to do given current market volatility…. Keep a fully stocked Emergency Fund. If you feel that a layoff is likely, consider stockpiling excess cash for a transition fund. Keep funds for short term goals out of the market. If you're nearing becoming work-optional, keep a significant portion of your portfolio in high quality shorter duration bonds so that you can draw from your bond portfolio to support income until equities recover. For long term goals, continue to invest for the long term. Market corrections are opportunities to buy equities at a discount, if you will, so continue portfolio contributions as planned. If you are deploying a large amount of cash into the market, consider whether you might want to dollar-cost-average over time. If equity compensation is a large portion of your annual income (which is the case for most of our late-stage private and public company clients), manage your spending so that decreases in your company stock price won't impact your ability to pay your bills. (This is why we often recommend a lower price point for a home purchase than might otherwise be possible to leave a healthy margin of safety for stock price drops.) If you have RSUs vesting on an ongoing basis, we generally recommend that you continue to sell shares as they vest (although there are exceptions - follow whatever Cyndi or I has laid out for you in our planning work together). This is because your RSUs are ultimately a bonus paid in stock, and we do not typically recommend using your bonus to buy your company's stock. Instead, we recommend using your RSUs to fund your goals or support your cash flow. ***This is being shared for informational and educational purposes only. This is NOT investment advice. Every situation is unique so please consult with a professional about your specific situation to see what makes sense for you.***

Most people stay poor because they invest in the wrong order. Everyone wants to buy stocks, gold, or real estate. But very few people focus on building the foundation first. Think of wealth like a pyramid. If the base is weak, everything built on top becomes risky. Start with an emergency fund that can cover 6–12 months of expenses. It gives you the confidence to handle life's surprises without breaking your investments. Next comes protection. A good health insurance and term insurance plan don't grow your wealth, but they protect everything you've worked hard to build. Only after securing your foundation should you consistently invest through SIPs. Over time, discipline beats timing, and small monthly investments can create extraordinary results through compounding. Once you've built that habit, you can gradually invest in quality businesses for long-term growth. And finally, diversify into assets like gold and real estate to preserve and strengthen your overall wealth. Remember: Wealth isn't created by chasing the highest returns. It's created by following the right sequence. Build patiently. Protect wisely. Invest consistently.

We make emergency kits for natural disasters but we don't make them for corporate disasters. To those unaffected by the Amazon layoff, whether you're at the company or elsewhere: you are not safe. If you think it could not happen to you, you are wrong. They don't care a whether your work on a critical function, your tenure, or that you need this income to support yourself and your family. Companies will drop you the moment you are perceived to be unnecessary. If you still have a job, think about what you would do if you were terminated and how screwed you would be if it happened tomorrow. Here's a basic emergency kit: Financial - Do you have an emergency fund? You should have at minimum 6 months of expenses covered. - Which expenses are strictly necessary? What would you cut immediately? What would you cut during a prolonged spell of unemployment? Think through this now so you don't have to when you get punched in the face. - Do you understand your severance package and rights? Know what you're entitled to before you need it. - Have you researched COBRA vs. marketplace insurance and the associated costs? Health coverage is VERY expensive when you're paying the full premium. Career Assets - Is your resume up to date? This will be difficult to update once access to your work computer is cut off. - Do you have all your critical contacts and documents saved elsewhere? Performance reviews, achievements, metrics, code samples, design docs? - Is your LinkedIn profile optimized and current? This becomes your primary professional presence when you lose your corporate email. - Do you have references lined up? Strengthen relationships when they are warm, not when you're desperate. Skills & Readiness - Are there skills or certifications you've been putting off? Access to these resources gets cut off immediately. - When's the last time you interviewed? Your interview skills atrophy faster than you think, and intense preparation is difficult when you are going through an emotional roller coaster. - Do you have a side income stream or have you explored one? Diversification isn't just for investments. Side income starts small and takes time to grow, like a tree. Plant some saplings. Amazon is not "done", and other companies will follow suit. The best time to prepare for a layoff is before it happens. Don't wait until you're scrambling, start protecting yourself today.

What would you do if tomorrow brought an unexpected career shift? For executives, even the most stable careers can face disruption—whether through layoffs, downsizing, or industry shifts. The key to navigating uncertainty is preparation. Here are five proactive steps to safeguard your financial and professional future: 1. Build a Financial Safety Net The rule of thumb is 6–12 months of living expenses in an emergency fund. Based on my experience, I recommend 12-18 months. Consider keeping it in a high-yield savings account or short-term CDs for easy access. 2. Diversify Your Investments Avoid having a significant amount of wealth in your company’s stock. A well-balanced portfolio across different asset classes reduces risk and provides flexibility. 3. Maintain an Updated Network Cultivate relationships within and outside your organization. Regularly connect with colleagues, mentors, and industry peers to keep your network active and supportive. 4. Invest in Your Skills Stay ahead by pursuing certifications, attending industry events, or developing leadership skills. The more versatile your expertise, the better positioned you’ll be for new opportunities. 5. Review Your Career Trajectory Reflect on your long-term goals. Are you where you want to be? Proactively exploring new paths can make transitions less daunting if they become necessary. Why It Matters: Preparing for the unexpected doesn’t mean expecting the worst—it means being ready for the best opportunities, even when they come disguised as challenges. A little planning now can save you from scrambling later. What’s one step you’ve taken to prepare for the unexpected?

Your emergency fund probably isn't big enough. There, I said it. Most financial "experts" are still pushing the same outdated advice: "Save 3-6 months of expenses and you're good to go!" This could be dangerous for most business owners and high-earners today. → If you're bringing in variable income → If you're self-employed → If you have people depending on your earnings The standard 3-6 month emergency fund is playing with fire. Here's why: When you run your own business or have commission-based income, market downturns and economic factors don't just affect your investments—they hit your actual income. Exactly when you might need cash the most, your ability to generate it could be compromised. I've seen it happen: → The fitness business that had to completely shut down for 4+ months  → The sales professional whose commissions dried up for 3 months None of them anticipated these scenarios. All of them wished their cash reserves were larger. For business owners and variable income earners, this is probably more in line: → 6-12 months of expenses  → Separate business and personal emergency funds → Additional cash reserves for business opportunities This isn't about fear. It's about freedom. A robust emergency fund doesn't just protect you—it empowers you to take strategic risks, seize opportunities, and sleep soundly regardless of market conditions. Will this approach mean slower investing in the beginning? Maybe. Will you thank yourself when (not if) the unexpected happens? Absolutely. I'd rather see a fully funded emergency fund before focusing on growth.

We're well into 2024 and layoffs aren't stopping. Want to bullet-proof yourself? I'll tell you how, but it's hard. STOP spending on frivolous things and START building your oh shit fund. The average time looking for work is 5 months now. That's the AVERAGE meaning some it takes less, but others.... that's painful. (Ask me how I know.) What happens when what you think won't happen to you does? Are you safe? Do you have the means to protect your family from the worst? What happens when an emergency happens while you're in an out-of-work emergency? Are you covered? Are you ready to take on additional debt while desperately looking for work? These are serious questions and ones you don't want to have to consider while looking for work. Don't know where to start? Here's a basic way to get started: 1. Calculate your monthly expenses. This means logging ALL of your expenses. No, your credit card statements aren't enough. Log every dollar, every penny. Know exactly how much goes to groceries, to utilities, to daycare, to your car, etc. EXACTLY how much each month. Get a real average, not a guestimate. 2. Find the ratio of income to expenses. Let's hope it's not 1:1. You need extra cash flow here... Your target should be a minimum of 50/50 but that's not realistic for everyone. Shoot for 80% of your income to go to expenses. SAVE that 20%. DO NOT TOUCH IT. 3. But here's the kicker, the less you save, the less you have in the event of an emergency. Just think, with the above math, it'll take you 5 months of saving to save just ONE month of expenses. Lower your expenses where you can so you can increase your savings. I practiced what I'm preaching here and saved 50% of my take home pay. After being out of work for 9 months, I still have runway. My hope is that more people take their money seriously and don't take a good income for granted. Don't let short-term pleasure replace long-term peace.

Profit won't protect you from emergencies. Cash reserves will. Building a safety net for your company begins with your numbers: • Calculate total monthly payroll costs • Add up fixed operating expenses • Factor in upcoming tax obligations • Then 3x everything for a bare minimum safety net When you're running without the proper reserves? • All your decisions are panic driven • You end up accepting predatory loan terms (usually with BIG %) • You miss prime growth opportunities • And what's worse, you watch your business's foundation start to crack Every business faces cash emergencies... But the real difference between swimming or sinking has always been preparation. Start with this: → Open a dedicated account → Set up automatic monthly transfers (this is a must. cash won't deposit itself) → Create clear usage rules → Establish replenishment guidelines Start with 5% of your monthly revenue until you've covered three months of essential operations. When you get everything dialed in, your emergency fund WILL grow. Remember, the best time to build your safety net is before you need it.