How to Build a Financial Safety Net

Building a financial safety net is imperative in this economy. It is better to pay yourself and build a safety net to support your needs as opposed to your wants. When building your safety net there are many things to factor in to determine the effectiveness of your safety net.

Three to six months living expenses

Most experts recommend three to six months living expenses should be saved. It is hard to save three to six months when you have a tight budget. People who own houses have an advantage they can call their lender and arrange adjustments in their mortgage payment when they face hardship. When saving three to six months living expenses it is better to save the amount with your wants and needs expenses included. I.E If you have subscription services, under utilized services and etc you should plan your savings with those expenses in mind. When it is time to dip into your savings make sure you cancel your luxury expense so you instantly stretch your savings.


When building a safety net, it is important to have investments you can easily liquidate. Easy to liquid assets are stocks and bonds. When having assets such as stocks you can make more money on your investment than you would with a savings account. You investments can also catapult your savings or financial net if you earn on your investment.

Buy gold

When times are rough you can count on gold to get you through tough times. Gold is an investment that does not lose much value. When gold it cheap make sure you buy 14K gold. The heavier the gold the better. When you build your financial safety net make sure you are buying real gold. There are many dealers out there who sell fake gold make sure check their policy before purchase.

Pay down debt

When times are good instead of spending you should be paying down debt. Most people like to spend money when times are good which is a backwards mentality. When times are good you should make the most of your savings and investments. When paying down debt make sure you pay down least expensive first. Worst come to worst you can afford to have one account go in collections as opposed to several little ones.

Building your financial safety net is imperative and should not be taken lightly. I hope the recession is a reminder of how responsible we should be with our money. Good luck!