12-Minute Financial Makeover Step 4 - Keep Cash Flowing with Crap-Happens Plan

Our Financial Makeover Series talks about personal finance basics and lets you figure out what applies best to your own unique situation.

In Part 1, we pointed out to avoid fees as much as possible, especially the devastating recurring ones. We also suggested to open a no-fee online checking account.

In Part 2, we followed up by proposing to use no-fee savings account to organize the projects that provide you pleasure. We insisted on how budgeting can allow you to spend more on things you truly love.

We continued on a similar theme in Part 3, telling you that budget choices can make you feel awesome and emphasized on how it could provide you more freedom.

This time, we’ll talk about another way to liberate yourself from financial worries setting up a solid custom-made contingency plan.

In the financial realm, we often hear about that basic concept to set up a rainy-day fund. Some might argue that their financial days are already rainy, if not stormy.

But we really believe starting an emergency fund can be a great first step to getting out of the hazardous living-paycheck-to-paycheck spiral.

The object is not to obsess about risks. In fact, your own crap-happens plan could allow you to forget about possible misfortunes and free you up, allowing you to truly taste and appreciate life joys and ventures.

Try to Get Money Worries Out of Your Way

We know many of you worry about money even in normal situations, some even worry about finances all the time.

The main objective of the financial aspect of your contingency plan should be set enough money aside to allow yourself to focus on living through tough situations and fixing things for you and your family. Your contingency fund should allow to relieve financial pressure as much as possible in these bad situations.

It’s impossible to anticipate all eventualities, especially the worst ones. But, having some and enough money stashed away for those bad periods sure may help to cope with any situation. No matter how bad it can be.

For instance, losing your job can be very tough both financially and psychologically. Yet, having money aside should at least give you some time to get your act together and focus on finding a new job.

Another example would be if your fridge or car breaks down. Most people often have to move heaven and earth just to scratch sufficient funds for those kinds of repair. The actual hassle of just getting those things fixed is bad enough. At least get the money part of it out of your way.

Because it’s Much More Than About Money

You don’t have to become survivalists, but your contingency plan has to be more than about finances. For instance, everyone should have a plan in place to survive at home for 3-4 days.

12-Minute Principles (Revisited)

The 12-Minute Series was originally posted in 2012.

We’ve decided to republish it integrally because we believe it can still help as everyone aspires to make things better.

Let’s hope it stirs up the discussion and stimulates you to change the world 12-Minute at a time!

This article was originally posted on December 12, 2012

There's more to the 12-Minute Approach than great number 12. Some principles and premises also inspire this revolutionary method.

They are exposed here with some brief explanations:

1-Realize Your Dreams  

Having dreams is essential. Dreams give life a meaning. They give you a purpose and a sense of direction.

Planning to realize your dreams is also important. By setting goals and making plans, you’ll move closer to your dreams.

Your unconscious and intuition will guide you thru the venture even if you don’t possess all the details right now.