Wealth Planning & Emergency Funding

Emergency funding is a simple basic concept of preparing for rainy days. Emergency funds are very useful when you are out of a job are when you or your family are in need of funds. That is why it is called emergency funding, for emergency uses only.

Generally, emergency funding is a very simple plan. The real difficulty is the consistent discipline in carrying out this objective. Our human nature is such that when we have extra disposable cash, we prefer to spend it first, then save it later, if any is left.

Go to wealth experts and ask a wealth query with regards to Emergency Funding.

Let us now look at the important aspects of Emergency Funding.

Again we look at the 5 Driving Forces                                            to determine our direction.

The 5 driving forces are Wealth Aspirations, Strategic Wealth Analysis, Strategic Wealth Planning, Wealth Action and Wealth Management.

Wealth Aspirations
First and foremost, you need to determine what sort of parameters you want to set for you and your family in the area of emergency funding.

From your personal Cash Flow statement you should be able to determine how much you can set aside on a monthly basis.

As a general rule of thumb, you need a minimum of at least 6 months of emergency funds. The most ideal situation is to be financially free, which means you do not have anymore debts

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Strategic Wealth Analysis
Next step is to make sure your Cash Flow is able to substantiate your aspirations. Having a wild aspiration on having a two year emergency fund by a short period of time when your Cash Flow statement says otherwise is the recipe for financial disaster.

Therefore, Wealth Analysis is to keep reality in check.

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Strategic Wealth Planning
Not so much of planning here. The only plan probably needed is to make sure a plan is realistic and achievable.

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Wealth Action
Just do it! Making sure that month in month out, the plan is being carried out.

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Wealth Management
Monitoring the situation is very important, as your financial situation can change very quickly, and when that happens we need to have an alternative plan.

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