![]() Maintain your possessions by following maintenance schedules, keeping them clean, and taking care of problems as soon as they’re noticed. Maintain your job by keeping up your skills, finding useful things to do during downtime, and paying attention to your performance reviews. Maintain your health by eating healthier foods, exercising a little, and getting adequate sleep. All of those things will keep running for a while out of sheer inertia, but eventually they’ll fail. It’s easy to not keep your house clean, to let your car fall into disrepair, to let your health slack, to not worry about the relationships in your life, to slack off at work, and so on. Maintain Your Stuff, Your Job, Your Health, and Your Relationships You can always decide when you have “enough” down the road. What’s important is that you simply contribute a small amount each week and each month and let it grow in perpetuity. How much of an emergency fund should you have? I don’t think the total amount is that important, though I do encourage people to add extra funds when they can if they have less than $1,000. That way, when an emergency happens – a car fails, a relative dies, you lose a job, etc. Just direct your bank to start moving a small amount each week or a larger amount each month into your savings account automatically so that you don’t even have to think about it. The time to get started on building an emergency fund is right now. This is important, because you may need that emergency fund at a time when you’re dealing with identity theft or a difficulty with your credit card issuer. An emergency fund can buy you a plane ticket, pay for a car repair, or anything else that might come up - without tapping your credit cards. An emergency fund is simply an amount of cash that you have sitting in an easily-accessible savings account so you can grab it when the chips are down. This is the most important thing you can do. These tactics either reduce the strain of a major unexpected event or else help you now with the decisions you might choose to make during a future panic. Here are five things you can do right now to avoid panic mode in the future. So, how do you avoid panic mode? What are some strategies for handling it if you find yourself in a finance-related panic? Let’s dig in. When you’re making major life choices and financial decisions in a short timeframe and under emotional duress, the outcomes aren’t always going to be what you want. In short, “panic mode” is almost always a bad state to find yourself in. Unsurprisingly, at least some of these stories ended up with less-than-stellar results. Their emotional response to an unexpected situation caused them to begin making poorly-planned decisions. ![]() What do all of these stories have in common? They’re all about people leaping into “panic mode” as the result of an unexpected event in their life. How did that move turn out? Again, we’ll find out later. In a panic, she bought a different house from those that were on the market in her area. A few days before she moved out of her house, she got into a major fight with the man she was supposed to marry and they chose to call off the wedding. How did that panic turn out? We’ll find out later.Īnother close friend sold her house in anticipation of getting married. Within a few hours, he was selling piles of his stuff on Facebook. He woke up one morning and found that his car wouldn’t start and he didn’t live in a place where mass transit was really an option. Not very long ago, another friend was working at a relatively low-paying job and he was definitely living in a paycheck-to-paycheck fashion. We’ll see how this panic ended up in a bit. Within a month, the relationship fell apart. She moved clear across the country with only the vaguest lead on a job and a deep sense of love and romance. She quit her job, packed up her bags, collected the relatively small amount of cash she could put together in just a few days, and departed. It was an abrupt move, one done in a panic-like surge of emotion. One in particular began to follow the daily and even hourly ups and downs of his retirement investments and wound up making some big changes to his savings – and we’ll see how that panic paid off later.Ī few years ago, I watched a close friend fall in love and abruptly move across the country. At least one family member watched their retirement fund literally lose half of its value in the last several months of 2008. In 2008, I watched as several good friends and family members slowly – and then suddenly – became panicked as Wall Street laid an egg. I threw several credit cards into a lock box. I dove into cleaning out my closet and selling things off. Sure, I did the smart thing and started reading and planning, but I also panicked a bit. I did the math and I realized that we just didn’t have the cash to go around. ![]() In 2006, I realized that I couldn’t pay my bills any more.
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