How to create a financial pillow?

After reading the article, you will learn how to create a financial pillow and what it is in general and why you need to create it.

I decided to write this article for one simple reason – the situation in Ukraine! A coup d'etat took place in the country, I will not write my personal attitude to the coup, but I want to say this – for more than 6 months the situation in the country has been unstable. Many people have lost their jobs, lost their businesses, many are not paid wages and pensions.

How to live? Why buy food?

How to pay bills, if people are used to living paycheck to paycheck and do not have any savings, and the delay in payments for only a month or two will practically lead to a huge catastrophe, hunger, people will be forced to somehow survive. Lack of money can push people to looting, banditry, robbery …

Of course, if you do not have savings, it will be very difficult for you during such periods.

But for the future, you can learn a very good lesson from this situation, and prepare in advance. And believe me, this will happen more than once or twice in our lives.

How to prepare yourself for such crises, revolutions and delays in the payment of salaries and pensions?

Let's start by simply defining what a financial cushion is?

In simple words, this is a store of money!

This reserve should cover the expenses of your family for a period of at least 3 to 6 months, but of course more is better. The best option is to have enough money to support your family for a period of 1-2 years.

And thus, when you create a financial cushion, it will allow you to survive an unfavorable period in difficult times, calmly take a breath, find a good new job, or organize your own business, create new sources of income, and not frantically grab any bad job at unprofitable for you conditions.

Now let's move on to the main question: how to create a financial cushion?

Everything is very simple here, every month you need to take 10 or even 20 or more percent of all your income and deposit them, for example, in a reliable bank for a period of 3-6 months. And let this financial cushion lie there and accumulate. Save up until you have accumulated an amount that is enough for you for a period of at least six months. Also, part of the money can be kept at home in a safe. Because banks can also burst and go bankrupt.

And now an example for clarity:

Suppose you spend 2,500 thousand USD on your life every month, multiply 2,500 by 6 – you get 15,000 USD.

So, your first goal is to save 15,000 USD as soon as possible.

Also, it is worth noting especially that you do not need to invest your financial cushion in risky assets, such as stocks, forex, PAMM accounts …

The purpose of creating a financial cushion is to always be easily accessible, and the most important thing is that you, despite all the difficulties, crises, salary disruptions, be confident and know that you have money and you can feed yourself and your family.

I heard this phrase in one video:

"The best financial cushion is a couple of millions in a Swiss bank"

And you can't argue!

If you didn't know what a financial cushion is until today and didn’t save money, then we recommend that you don’t waste time and make decisions about creating it from today.

We live in a very unstable world, and creating such a pillow is a very important decision, it will help you get through difficult periods, job loss, salary delays…

So don't waste your time! The sooner you start, the better!