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the status quo than to change. Fact is, you cannot save $10,000 until you save $1,000. You cannot save $1,000 until you save $100. You cannot save $100 until you save $10.

The best way to start saving is to create an automatic deduction of a specific amount of money every month from your regular account to the savings vehicle you’ve chosen: RRSP, RESP, or TFSA. It’s all very well to think about it, plan to do it, ponder on the benefits you’ll derive, but if you don’t actually set up the auto deduction, you’re just spinning your wheels.

GAIL’S TIPS

If you get a tax refund for making an RRSP contribution, use the refund to boost your next year’s RRSP contribution. You won’t have to take any more money from your cash flow to increase your savings, and those savings will keep growing as you keep reinvesting your tax refund each year.

Getting from where you are now to where you want to be requires that you do something differently. If you want to stop spending money you haven’t yet earned, you must stop carrying your credit cards. If you want to make sure your family isn’t tossed to the wolves if you die, you buy insurance. If you want to have something in the future, you don’t spend that money now; you save it for when you’ll need it. You must change what you are doing or not doing to something that works for you instead of against you.

Change is exciting. Change brings challenge, learning, and a sense of New. Change is full of promise. Change is audacious. It takes guts to change. It takes real guts. And guts are something that seem to be in short supply these days. If you have them, you’ll make it. If you don’t, well, so sorry. No guts, no glory.

So the question you have to ask yourself today is this: do I have the guts to change?

If the answer is “Yes,” then what are you going to change—today? What small step will you take to move you from being at rest to being in motion? What will you do (not think about, not plan, not worry about, not whine about) to change what your life looks like? What will you DO?

Saving isn’t a “nice to do,” and we have to stop treating it that way. Saving is a must do. Having money at hand is what gives us the flexibility to cope with the crap that inevitably comes up in life. Money gives us options. No money … no options … sad life.

9

BUILD AN EMERGENCY FUND

Crap happens. That’s life. If you don’t have some money set aside to deal with the poop the Fates throw at you, you’re in for a tough haul. I routinely meet folks who do not have a stash of cash at the ready just in case the unimaginable becomes all too real simply because they never thought it could happen to them. And I hear from hundreds more: sad souls who have hit a wall and have no money to help them over the hump. I’m not sure just what I have to say to influence you to get this very important part of your financial safety net in order other than this: if you have some money available to help you through whatever life throws at you, things will be a lot less stressful than if you’re dealing with caca and no money at the same time. Having money in the bank means you have options.

It doesn’t really matter how well you think things are going. Like the economy, life is a cycle. Sometimes you’re on your way up the positive side. Sometimes you’re on your way down the negative side. That’s just the way life is. And it really shouldn’t come as any surprise at all since it has always been thus.

Building up an emergency fund is an important part of your risk management. But you already know that. You’ve no doubt heard that it’s a good idea to have between three and six months’ income set aside. With the recent crisis, some financial pundits have raised the bar, suggesting you may need as much as eight or nine months’ worth of income since a down economy means a longer recovery period. Most people are overwhelmed when they think about gathering up that amount of money. Don’t worry, I’m going to show you how in small steps anyone can manage.

EXCUSES FOR NOT HAVING AN EMERGENCY FUND

I get two big push-backs when I talk about an emergency fund with people. The first is, “How am I ever going to save six months’ worth of my income? That’s frickin’ impossible.” The second is, “You mean I should leave half a year’s income in a savings account earning a pittance in return? You’re nuts!”

The answer to the first question is, “One dollar at a time.” The answer to the second question is, “Yes.”

Establishing an emergency fund isn’t an easy thing to do, particularly if you’re living pay to pay and trying to get rid of a crapload of debt. But the alternative sucks even more since the first time the caca hits the fan, any progress you’ve made with your financial foundation will be wiped out. Talk about demotivating. If you or your partner lost your job, or if one of you became ill and couldn’t work, would you be able to pay your bills on one income? If not, you need an emergency fund. If you’re the sole provider for a family, a single parent, or a dude or dame on his or her own, all that stands between you and a warm open grate on Main Street is your emergency fund.

The rule of thumb for finding a new job is that it takes about six months. In a crappy economic environment, you can probably double that. And heaven forbid you should get sick because on top of no