{"id":917,"date":"2019-10-03T00:22:07","date_gmt":"2019-10-02T15:22:07","guid":{"rendered":"https:\/\/bluebook.mylifehouse.com\/step-2\/"},"modified":"2024-02-08T16:44:39","modified_gmt":"2024-02-08T07:44:39","slug":"7-steps-to-financial-freedom-step-2","status":"publish","type":"post","link":"https:\/\/bluebook.mylifehouse.com\/zh-hans\/7-steps-to-financial-freedom-step-2\/","title":{"rendered":"Step 2: Save A Beginner Emergency Fund"},"content":{"rendered":"<h3>Save A Beginner Emergency Fund<\/h3>\n<p>&nbsp;<\/p>\n<p><strong>What\u2019s A Beginner Emergency Fund?<\/strong><br \/>\nSave and set aside $1,000 for a \u201crainy day\u201d.<br \/>\nIn case something goes wrong, instead of going into debt you can use this emergency fund.<br \/>\nPut it somewhere you can\u2019t access easily so you won\u2019t be tempted to spend it on that holiday or latest iPhone.<\/p>\n<div  class=\"x-accordion-group\" ><div class=\"x-accordion-heading\"><a id=\"tab-663327a2c5e21\" class=\"x-accordion-toggle collapsed\" role=\"tab\" data-x-toggle=\"collapse-b\" data-x-toggleable=\"663327a2c5e21\" aria-selected=\"false\" aria-expanded=\"false\" aria-controls=\"panel-663327a2c5e21\"><i class='x-framework-icon x-shortcode-accordion-icon' data-x-icon-s='&#x2b;' aria-hidden=true><\/i><span>Proverbs 21:20<\/span><\/a><\/div><div id=\"panel-663327a2c5e21\" class=\"x-accordion-body x-collapsed\" role=\"tabpanel\" data-x-toggle-collapse=\"1\" data-x-toggleable=\"663327a2c5e21\" aria-hidden=\"true\" aria-labelledby=\"tab-663327a2c5e21\"><div class=\"x-accordion-inner\">The wise store up choice food and olive oil, but fools gulp theirs down.<\/div><\/div><\/div>\n<p>What do wise people do with their money in a good season?<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Do You Need \u201cPlastic Surgery\u201d?<\/strong><br \/>\nIf you have trouble spending money that you don\u2019t have on credit cards, perhaps you should cut them up!<br \/>\nYou can also switch to a \u201cdebit card\u201d where the money comes directly from your bank account.<br \/>\nThis also helps with budgeting, with a credit card it is like looking in the rear vision mirror.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Credit Card Points<\/strong><br \/>\nOften times stores or companies offer a \u201cpoint system\u201d.<br \/>\nMany times it is just a system to get you to use the credit card more.<br \/>\nBe wise and live on the money that you have in the bank, not on what you can repay in the future.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Plastic or Cash?<\/strong><br \/>\nOne of the most often cited studies is one conducted by Dun &amp; Bradstreet, where they found that people spend 12-18% more when using credit cards instead of cash.<br \/>\nMcDonald&#8217;s reports its average ticket is $7 when people use credit cards versus $4.50 for cash.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Life Insurance<\/strong><br \/>\nIt is a wise thing to take out life insurance to support anyone that replies on your income (eg. spouse, kids) in the case of your death.<br \/>\nA recommended amount is to take out insurance equal to 12 times the income needed each year.<br \/>\nThis means the insurance payout can be invested and 8% each year can be drawn to live on, leaving a buffer for the investment to grow and account for inflation.<br \/>\nIn most cases the government pension will not cover a family&#8217;s needs so you will need other insurance.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Term Life Insurance vs Whole Life Insurance<\/strong><br \/>\nTerm life insurance is the most simple and inexpensive type of life insurance and is easily available online.<br \/>\nThe cost is approximately $10 \/ month per $100,000 of insurance, and the rate stays the same throughout the whole term.<br \/>\nIt may be more expensive depending on your age.<br \/>\nYou can decide how long the term should be, but in most cases it is recommended to set the term until your kids are out of college (eg. 20 years)<\/p>\n<p>Whole life insurance is a package of term life insurance, insurance and savings.<br \/>\nIt is usually sold in person, has large commissions, and is much more expensive.<br \/>\nIn most cases it is best to get your insurance with an insurance company, savings with a bank and investing with a securities company.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Medical Insurance<\/strong><br \/>\nThis is insurance to cover any gap between government health insurance and hospital fees.<br \/>\nOften times for a longer stay in hospital this can be about $50-100 per day or $3,000 per month!<br \/>\nThe cost is approximately $20 \/ month for $100 of coverage per day and may be more expensive depending on your age.<br \/>\nMost plans also include payments for new or advanced treatments.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Long Term Disability Insurance<\/strong><br \/>\nThis is insurance to cover your loss of income from accidents that prevent you working.<br \/>\nIt is more expensive than the other insurances as it is much more likely to occur.<br \/>\nThe approximate cost is $50 \/month for a $3000 \/ month salary, and may be more expensive depending on your age.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Save A Beginner Emergency Fund &nbsp; What\u2019s A Beginner Emer &#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[38],"tags":[739],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Step 2: Save A Beginner Emergency Fund - | The Blue Book<\/title>\n<meta name=\"description\" content=\"Sae and set aside $1,000 for a \u201crainy day\u201d. 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