When financial distress happens, it often takes many different forms. Sometimes it’s a medical catastrophe. Other times it could be a job loss. It could be a plumbing issue at your house or a broken down car.
Regardless of the cause, when financial challenges pop up the first things that we need to protect as individuals are our GUTS. Unfortunately, our GUTS are often the first thing we neglect in order to take care of these disasters and the result is compounding money problems.
GUTS are an acronym for:
As you budget your income each month and as you plan out how much money you need to save in an emergency account, prioritize your GUTS. Protect you GUTS. These are the most essential things for you and your family each month and they’re also the things that can compound financial problems the fastest if you neglect them.
Before you pay off a dime of debt, your first goal is to set aside 1 month of your GUTS into an emergency account. This will allow you a small cushion in life so when emergencies pop up you can still take care of the most essential things in your life without going into more debt or skipping out on the light bill.
Most of our clients are able to save 1 month of their GUTS and accomplish this goal within 4-6 weeks. They sell things around the house they don’t need. They slash their expenses of services they’re not using, like streaming services, and cable TV. They renegotiate insurance rates, cell phone contracts, and utility providers. They stop eating out in restaurants, pack their lunch each day for work, and reduce their spending down to only the things they find most essential. They also find ways to boost their income. They’ll pick up part-time work delivering Pizza’s. They’ll ask their boss for a raise or for overtime opportunities. They’ll start side hustle businesses like mowing lawns, fixing fences, refinishing furniture, tutoring, babysitting, and a host of other things. Basically they get insanely intense about slashing expenses and boosting income so much that they’re able to save more money than they ever have in their lives in a very short amount of time.
After reaching the goal of 1 month of GUTS in an emergency account, it’s time to start tackling debt using all of that momentum you just created.
Check out our budgeting forms for help creating your budget.