A mindset shift that will save you thousands!
Did you know that firefighters NEVER run into a burning building?
I didn't know that. I heard it on a podcast about parenting. But I thought it was profound.
The rescuers don't run towards danger. Well, what the flip are they doing? And how does it relate to my money?
Gather as much information as quickly as you can
Firefighters don't run into a burning building because they take the time to survey the scene. They are looking, smelling and listening. They are gathering as many clues as they can about the fire itself and the victims inside.
Rushing in blindly looks brave, but its foolish. First responders don't react they respond. They get as much information as they can, and they make a plan.
It's important to note that first responder plans aren't perfect. They never have all the information that they need. But they have enough to rule out the stupidest options.
What if we had that same mindset with money?
If you face a job loss, an expensive car repair, or some other financial emergency, I would commend not reacting. Emotions and emergency don't mix well. To be a real rescuer, you cannot react like a victim. Instead, you must respond like a rescuer.
Take the time to see what resources you have. Don't let money flow out of your account. Instead, become slow and deliberate. Of course, you'll need to hustle to get money coming in. But I wouldn't necessarily respond to every single Craigslist post you see. Instead, consider where you can get the top dollar for your time and start working there. If you have a traditional job, you'll have unemployment benefits. You don't have to be desperate.
Conserve your resources
Firefighters also don't run into burning buildings because they want to keep their heart rate down. This allows them to conserve oxygen for the time when they really need it (ie- when they are hacking down the building to rescue you).
You can do the same thing with your money. Make a point to conserve your cash until you REALLY need it. Yes, you may need to dip into your emergency fund. But don't start with that. Consider ways to cut back on your spending that will have an immediate impact.
This is especially important if you're facing an uncertain income situation.
Take action with a bias towards safety
Firefighters train for a reason. They don't follow their hearts in an emergency situation. Instead, they've trained themselves to quickly determine the plan that will do the most good with the least risk.
That isn't to say they face no risk. Firefighters sometimes die doing their job. However, they make plans with a bias towards safety.
When you're faced with a financial crisis, the wrong question to ask is, "What is the optimal financial decision?" Instead ask, "What is the safest route that will still alleviate the crisis?" You have to alleviate the crisis. You have to stop the fire from burning. But you need to do it in the safest way possible. That should mean not panic selling all your stocks. It should mean choosing carefully which bills go unpaid (if applicable). It should mean protecting your assets first and your credit last.
Ideally, we would all mentally train ourselves on how to survive any financial threat. We can practice bare budgeting and living uncomfortable lives. We can practice making an income out of nothing.
Practice makes us calm when we face the real deal.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.