Wednesday, January 21, 2009

Financial Goal #2: Foundation Building

I've been thinking about my financial state of mind lately and an old, fuzzy memory bubbled up from when I was about 6-years old.

My parents made my sister and I attend Sunday school. This activity fell under the category of "Do as I say, not as I do".

A rickety old church bus would come by to pick us up. I would go to great lengths to avoid getting into that thing. Once aboard, I knew my Sunday morning would be spent in a tortuous, stuffy room being subjected to a lot of metaphors and parables that my young mind just couldn't grasp.

Sometimes, on Saturday nights, Mom and Dad stayed out a little late partying with their friends (cue Dean Martin music), thus having a tendency to sleep later that normal Sunday mornings. So, often my best strategy was to not make a peep in the house until the yellow monster roared past our house without our young souls aboard. Do you know how difficult it is for a 6-year old boy to lie in bed, motionless, for what seems an eternity? OK, you get the picture.....

When I wasn't able to dodge the bus and was hauled off to that church basement classroom, there were certain activities that were always part of the fare. One in particular was a song we sang about two men building their houses on rock and sand respectively. It was one of those hand gesturing songs. Being a kinesthetic learner, I'm sure all the corresponding hand-gesturing-while-singing burned the experience into my little, cartoon addled memory. Fist on fist represented the wise man building his house on a foundation of rock; wiggly fingers in a downward arc depicted the fool's house being washed away with the sandy foundation. (Guess there were no strict building codes in the Biblical times.)

Some lessons in life need to percolate for a while before their significance comes to bear; sometimes it takes nearly a half century. Of course I get the theological lesson our dear Sunday school teacher was trying to impart. But like many principles in life, this one is coming home to roost financially in 2009.

Wife and I have never been ones to build a large emergency fund. We were always too impatient to go through the process (there's stuff out there to buy you know!) and we'd always figured that if an emergency did arise, we'd tap into one of our generous lines of credit. The folly in that line of thinking, of course, is that we'd be post-emergency with a huge debt hanging over our heads. And perhaps the nature of the emergency would be such that it could have far-reaching effects such as an injury or long job interruption.

This recession has shaken me out of my foolish reverie and forced me to take a hard look at the tenuousness of our financial situation. We look good, and smell good but we're 60 days from potential financial disaster. The lessons are all around us.

So, this year our second financial goal behind debt reduction is to put 3 months of expenses into savings. This is only a start for our emergency fund. (By the way, we currently have $1,000 squirreled away for small emergencies.) After we accomplish Goal #3, to be discussed in a later post, we'll add to our emergency fund and bring it up to the equivalent of 6 months expenses.

Like a rock, Baby!


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