Black gold and Texas tea! Crude oil goes by various nicknames and humans constantly scour the Earth looking for more of it. We look North and South, on land or underwater, and in good weather and bad for more of this go juice that powers our cars and contraptions.
The hunt for oil is much like a gold rush. When a discovery of a new deposit is made, individuals and companies rush in to acquire land, set up wells, and claim their share of this prized commodity. Money starts flying around left, right, and center. Population surges and so does building activity.
People’s pockets start filling with money they did not have before and the spending sprees ramp up. Then, as fast as the boom, comes it suddenly comes crashing to a halt with falling prices per barrel of oil, etc… People are left with their heads spinning and their pockets empty.
So what does this boom-bust cycle of the oil industry have to teach us about saving money?
It is a clear illustration of why saving for a rainy day is so important. When things are clicking along great and the money is flowing, many people forget that sunny days do not last forever. The rain must come, and when it does, it may last for a long while. Illnesses happen, people age and are not able to work the way they once did, and business workforce needs change.
By socking away as much money as possible during the sunny days, you are essentially building yourself a shelter in which to take cover during the rain. You are providing yourself a cushion on which to land when the sands you have been standing on start to shift.
If the thought of diverting money from day to day demands seems overwhelming, simply get started by building yourself an emergency fund one dollar at a time. Begin with building up a fund to cover 3 months of expenses and work your way up from there to 6, 9, or even 12 months of expense coverage saved away.
I have found, as I believe many others have as well, that having this emergency fund is so comforting that you will want to keep saving from there building towards retirement, a long-term dream goal, etc… Successful savings seems to make you want to save more.
And the great benefit, as build up your savings, is that you are also constructing a barrier between yourself and the boom-bust forces that have been a constant of human existence throughout the generations.
For more money management tips:
How 24 Hours Can Save Your Budget
3 Things You May Not Know About Coupons