I read in a Wall Street Journal article that almost half of all Americans would have to sell some of their possessions if they needed to come up with $2,000 cash within 30 days. The author called these people “financially fragile”.
Wow! That’s disturbing statistic.
It’s especially surprising when you realize that a normal emergency expense like a major car repair or a child’s broken arm (which happened to my son a few weeks ago) can pretty easily set you back a couple of grand.
Why Are So Many of Us Financially Fragile?
So what’s the deal? Why is it that almost half of us would have trouble this level of expense, even though all of us know an emergency is going to happen sooner or later? I believe it’s because most of us are not paying enough attention when it comes to our finances.
Too many of us only have a vague idea of where our money goes in any given month. Save a little here, buy a little there, pay the bills, it all works out right? Except that a large number of us end up hurting when we incur that inevitable $2,000 emergency expense THAT WE KNOW IS GOING TO HAPPEN.
So is this situation happening because of pay cuts, job losses, or a bad economy?
But I think the biggest reason is because the average person just hasn’t been intentional with the family budget and doesn’t usually make a written plan for how to use their money.
Webster’s defines the word intentional as “a determination to act in a certain way; what one intends to do or bring about”.
When you’re intentional with our money you know where every single dollar is going, and you have control of how the money flows in and out of your life. Saving money is a lot easier because your intention is to make things flow properly so you can build an emergency fund that will be your life preserver that will keep you from drowning when the inevitable tsunami hits.
When you decide you need to be intentional with your finances you’re definitely not normal. You don’t become part of the 50% who are “financially fragile”.
When you decide it’s finally time to take action, you’ll change your financial picture for the better, and that’s when fragility turns into strength.
That’s when you start winning with money.
Are you financially fragile?
What are you doing to change that?
Let me know in the comments.