67. Make sure you have "fall back money".

Sometimes I feel like a broken record cautioning people to be fiscally responsible or maybe a closet financial advisor. My lifetime spanned from the thrifty fifties through the richest period of human history. My childhood was spent watching every penny, to my later life when money seemed to flow like water. The last several decades have been the "best of times" for many. 

It is sad to say that a lot of people have been living the good life and not paying much attention to the possibility of an economic slowdown. Our current COVID pandemic has caused global economies to recede dramatically and impact the financial security of many. With the credit card mentality that has been growing steadily, every Canadian - man, woman and child - owes about $22,000 personal debt. To many, the sky is falling and they never expected it.

I recall as a student studying the wonders of compound interest. My teacher made us do the math to examine the practice of saving a small portion of your income every month. We were wowed when we learned that a $100 a month saved every month of our life in a compound interest account would yield trillions of dollars when we got old. As amazed as we were at the miracle of compound interest, and a regular savings plan, none of my friends nor I actually followed the plan. This is just another example of the old adage, "You can show a human how to make a million dollars and they will not do it if it requires any personal self discipline." Or something similar! 

While I never saved to the extreme, I always was fairly frugal and managed to accrue a reasonable savings account. Financial advisors suggest that a person should have at least three-months salary saved in case of an emergency. I would suspect that the number of individuals who actually have that kind of savings is very small. 

Possessing a small savings account, in my opinion, is also a tonic that helps reduce daily stress. To know that if you lose your job, or need a new car, or the fridge dies, you are not going to be thrust into debt. Fall back money will help you achieve some peace of mind!