Reserves - Learning From History

I’m Miriam Neff, and I’m Valerie Neff Hogan with Wise Women Managing Money.

M Two significant economic disruptions happened about a decade apart.  A great recession starting in 2007 impacted families.  The global pandemic in 2020 again, shook-up financial wellbeing. Many debts were carried forward.

V This highlights the necessity of having money in reserve to cover 3-6 months of your spending plan.  Not just a good idea, a necessity.  In that disruption, we change the family spending news.  What is a want and what is a need?  The item matters, not the brand. 

M Let’s learn from history.  Incurring debt means we’re assuming our financial picture will be getting better.  Fact: disruptions happen. Debt does not go away. It has increased in both cases.  That 3-6 month reserve is wisdom.