Do I Have Enough Money

Do you have enough money to survive?

If not… you’ll always be at risk of being financially unstable when an emergency can and will happen.

Shit breaks, accidents happen, people die, and divorce is a thing. You’re going to have to replace things you can’t put off for weeks or months.

There are going to be plumbers, electricians, and other service providers you have to pay.

This is why it’s always best to save money when something unexpected can and does happen.

But… the question is, how much money is enough?

And the answer to that question for you is going to be different from everyone else.

You and I are not the same. We have so many different things going on in our personal lives that change(s) the answer to that question.

But you need to consider two things when trying to figure out if you have enough money.

First, you should take into account your current financial situation. If you’re living life and all your basic needs are covered, then you have enough money right now.

Once covered, you should think about your future financial situation. Which will help gain financial independence over time.

Do I Have Enough Money for Now?

Emergency Funds

Save at least 3-6 months’ worth of your normal monthly expenses in your bank accounts.

That way, you have something to use when an emergency happens.

This is the golden rule and a general recommendation when it comes to your personal finance.

Even if you’re currently paying off loans, it’s still important to have an emergency fund so you have something to fall back on.

Your emergency fund will defend you from any unexpected debt that wants to eat your money and attack your pockets.

But Why 3-6 Months in Your Emergency Fund?

Having a job can give us enough money to be financially stable for now. But, as I said earlier, shit happens.

You should always anticipate a problem coming your way.

For example, what happens if your boss suddenly fires you?

  • Will you have enough money to pay your bills until you get hired again?
  • Are you going to ask friends and family for money?
  • Will you have to use your credit cards and go into debt?
  • And how long will it take you to get back on your feet?

Because on average, it takes 3-6 months before you can find a new job after being laid off.

And at times, especially when there aren’t many jobs, and everyone and their mama is looking, it might even take you longer.

This is why having six months’ worth of income is important.

Even if you suddenly lose your job, you have 6 months to get back on track. With six months of money set aside, you have enough money for most of life’s random emergencies.

When to Use Your Emergency Funds?

As mentioned above, emergency funds can be used if you’re suddenly laid off from your job.

It serves as your safety net. And gives you enough time to find a new job or arrange your affairs.

But this isn’t the only use of emergency funds.

One emergency can easily bankrupt anyone, especially if you’re not prepared for it. An average hospital stay can cost up to $11,700.

If you have zero savings in your account, you might not be able to get the care you need. Remember to use emergency funds only when necessary.

Recurring expenses like car maintenance, your phone bill, and a streaming subscription are not considered an emergency.

If you find yourself using your savings to pay your bills, you should create a new budget to manage your finances better.

Current Financial Situation

The next thing you need to consider is your current financial status. If you earn enough to pay off your bills, then you’re currently in a good position.

And if you’re still paying off debt right now, your money might not be enough to handle many of life’s bigger emergencies at the moment.

So it’s time to get back on the right track. Pay off your debt as soon as possible and save up some more money.

Maybe you can cut back on some of your expenses by moving to a smaller house, cooking your own meals, and finding other ways to save.

But there’s a lot of things you can do to make your money enough for your current lifestyle.

And your current situation, when read from your monthly financial statements, tell a story.

They’re showing and telling you exactly how your money is being spent. And just how much money you need to have saved for a rainy day tomorrow.

You have enough money for your current financial situation when you have an emergency fund set aside and can comfortably pay your monthly bills.

And when you’ve done that and have some extra money left, you can use it as a stepping stone.

Go from paying off debt to saving and investing your money to achieve a more financially stable future.

Do I Have Enough Money for the Future?

But then, you might also be asking, “How much money is enough for my future?” Planning your current financial situation is important, but you also need to consider your future.

When you “have enough to retire,” which = 25x your yearly expenses, you will have enough money to pay your bills and other random monthly expenses in the future.

So if you want to live off of $30,000 a year for the rest of your life, you’d need $750,000 invested to never have to work a regular day job.

F.I.R.E. (Financial Independence, Retire Early)

This popular method of handling your personal finances involves sacrificing things you don’t like or care for.

So you can save and invest your money to retire earlier than most people do with a good amount of money.

You might think it’s impossible, but if you know where to put your money, you can save up enough for your future.

This method might be extreme for some. But it actually has a huge benefit…

Do whatever the hell you want with your time for the rest of your life.

You have to live frugally for a few years and focus on saving and investing your money until you get a steady source of income from your investments alone.

Once you reach your target, you can “retire.”

And the money you get from your investments will serve as your source of income and should be enough for you to live comfortably for the rest of your life.

Why Invest?

Let’s be real, investing isn’t something an average person thinks about.

After all, if you’re living from paycheck to paycheck, it’s hard to think about risking a bit of your money to invest and let it grow.

You’re more worried about your next meal, bill, or living expense. Not investing.

However, regardless of what many people think, investing doesn’t need to be too risky. There are investment methods that balance income with risk.

And, you don’t even need to have a lot of money to start investing. You can start right where you are.

Because as long as you have your emergency funds, you can safely invest your extra money. Even if all you have to invest is $5, $10, $20, or $50, you can invest.

And while you continue to earn additional income, you will at the same time be preparing for your future.

Inflation Rates

Your retirement planned the right way can be enough money for you if you’re only considering your cost of living at the moment.

However, it would be best to consider how much living comfortably will cost you in the future.

And living comfortably is why investing is a good thing. And a thing you should be doing.

The money you have sitting in your savings account WILL not provide enough interest to earn an income that considers inflation rates.

Meanwhile, investing is closely tied to any economic change(s).

And as long as you study investing and lower the risk of losing money, you can have enough money for both today and your future.

But first, you have to figure out – how much money you’ll need in the future? What do I want to spend each year for the rest of my life?

And then multiply that number times 25. This will give you your financial freedom number.

Once you know your number, it’s easier to work your way backwards and invest until you hit financial freedom.

In Summary – Do I Have Enough Money

There is no simple answer when it comes to do I have enough money? There are a lot of different things you need to consider.

And depending on your lifestyle, income, and current financial situation, you can get an estimate of how much money you will need to earn, save, and invest. So you can live comfortably one day for the rest of your life.

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