Some of you might wonder what a G.O.K. fund is…

The expression once said by Dave Ramsay, a financial radio talk show host and best-selling author, means “God Only Knows” fund, or also more affectionately known as the Emergency fund.

We try so hard to set goals, but it’s the unexpected curve balls life throws at us that ruin our perfectly well thought out plans, like:

• The car has to be repaired
• Our furnace just died
• I just lost my job
• Little Johnny needs braces…

What’s with that?

That’s why so many people don’t follow through with their life plans, because life happens! Nissan’s ad expression says it all, “shift happens”. Although a more colorful colloquialism comes to mind, I think you get the point.

So why have a God Only Knows fund? Job loss is one of the big reasons to have an emergency fund. More than ever before, one should have as little as three months or as much as nine months of income socked away - that is a good strategy in today’s reality.

Some believe if you have access to an unused credit card for emergencies it’s the same thing…well it’s not. As soon as you use the credit card for emergencies, you put yourself into a debt spiral you may not get out of so easily and will regret later on.

Let’s face it, having an emergency fund gives you breathing room between life experiences and allows you to weather through the storms of circumstance - or “God Only Knows” events.

Ten percent per pay - keeps the debt collector away

The best place to start is with an achievable goal of saving $1,000. As “The Richest Man in Babylon” so wisely recommends, put away 10% of every pay BEFORE paying for any expenses like your mortgage, car payments etc. - take the 10% right off the top. It is a small enough amount that won’t have a huge impact on your quality of life; yet big enough to add up significantly when you stick to the plan. Once you have achieved your first goal, set your next target, say $2,000, and so on. Make it a habit and it’ll become second nature to you - you won’t even miss the money! Remember though, this is not investment money for retirement.

Yes…you’ll be tempted to access that money - especially when it reaches a sizable sum. Think of all the great things you could buy with that money just sitting there! Let’s be clear. Once you reach the amount you want in your G.O.K. fund, stop putting more money in it - you’re done…you’ve reached your goal.

So let’s say your $5,000 goal was accomplished. Now your new mission is to re-direct cash flow to pay down debt as fast as humanly possible. Once you have completed the debt dump, put some money aside for fun stuff - like a vacation!

See how, in a short period of time, you have money for a rainy day, paid off toxic debts, and cold hard cash for those times you just want to have fun. Little victories like these make it easy to eventually reach your Financial Balance Point™.