investing
7 small steps to big savings

Living without an emergency fund is like sailing on a cruise ship that's not equipped with a life boat. You experience smooth sailing until rough waters imperil the ship -- and then you have few options.

If you don't have an emergency fund, it means your threshold for risk is set dangerously high -- to a point where normal events can become emergencies. Have you ever felt uneasy because you weren't sure you had enough money in your checking account to cover the checks you wrote?

What if you had a different "set point"? What if you started to feel uncomfortable when your reserve funds fell to $10,000? That's the difference between living paycheck to paycheck and having a wealth mentality.

You may believe you don't have extra savings set aside because you don't make enough money or you've had a run of bad luck. Or maybe you think you'll save after you get out of debt. It might be counterintuitive, but unless you start saving regularly, that day may never come.

Certified Financial Planner Bedda D'Angelo of Fiduciary Solutions in Durham, N.C., uses a wealth-mentality approach with her clients so they transition from dependence on paychecks to independent wealth. It all starts with emergency savings.

Follow D'Angelo's tips to facilitate the mental adjustment you'll need to shift from lack to abundance.

Get a wealth mentality
These practical steps are unconventional in some ways, but they will help you implement a plan.
1. Focus on your progress 
D'Angelo's clients are often initially embarrassed when asked about their goals because they don't see the progress they've already made.

"When people don't have an emergency fund, it's because they don't focus on what they own; they focus on what they owe," says D'Angelo. Maybe you have college loans or credit card debt, but set that aside for now and start with what you do have and build from there. You can't build from debt.

D'Angelo discovered that people take little note of their assets when they are focused on what they don't have. "I'll ask (clients) for paperwork and they leave out their 401(k). They may own a lot in Florida but they don't think of it as property. It's always a shock to them to see that they own anything."

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For this reason she asks clients to give her their 401(k) balances every month because it helps them see their progress.

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