Finances - Constructing Backup Reserves with Hive

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Hey there everyone! Zak here from Cape Town, South Africa.

I shall start off by saying that quantities are relative. Depending on your financial needs and your account growth, the numbers I speak of in this post might not work for everyone, but it is the CONCEPT that I wish to share!

The main idea here is that if you do not have financial reserves for emergencies, that you should make one! Right now my monthly budget is severely constrained. When it was less restrained I would set aside money every month to build up over time in case something bad would happen.

So before I continue: I think it best practice for most people (start with the kids) to learn to keep a budget and I am dumbfounded when I hear about people who have zero financial plan in their lives!

A person should know how much they earn and how much the basics costs. Then you will know if you can afford what you spend your money on. One of the things you need in this equation is the “Rain-day-fund” or reserves as I have called it above.

Now, back to the task at hand! How to build a financial reserve with Hive!

Right now my financial budget it in the negative. It’s in the negative. My expenses are higher than my income and this causes no small amount of stress. I am doing what I can to mitigate this condition but the fact of the matter is that my normal income cannot give me cash reserves. It does not hold up. I have debts that I need to pay off.

Now… being debt free is a whole other post and concept and of course I would really love to have no more debt to pay off. However, before I get there, I would say that it is even more important to have a cash reserve in the bank/pocket so when an emergency arrives, you can deal with it.

Life is like that, there will always be something that will pop up. You can’t tell what it might be. But you can put yourself into a position from which you can respond to threats and problems with alacrity and have some money to deal with it.

Some people want to put all their extra money into paying debt, but this is not too wise. Should something else happen then you would need to take out a new load to deal with the new problem.

So… HIVE allows me to build up reserves. We earn an HP stake from blogging, curating and commenting. We earn some HBD as well which comes with an amazing 20% interest rate! The Hive stake gives you a savings all on its own that should always be grown and there should be plan involving it.

Recently I had to do two thing: I needed to do a power-down to handle some expenses. I did a single power down of 307HP and it completely changed my world. Sorted things out for me. I also needed to withdraw my $80 HBD Savings and add that to current HBD and drew $110 for one specific expense and then a few loose dollars to add to the 307HP.

Now I am on the path to re-grow the used up Hive and HBD to regain my financial position. I am doing mostly 100% powerup posts and have aleady regained 1/3 of the lost HP in around 8-9 days. I need to keep up the momentum and get myself back to 5000HP!

Then I need to pile-drive HBD savings. The aim for April was to have $85 in savings. Currently, I am increasing my HBD savings by a mere $5 a month, does not seem like much, but it saved my bacon at the end of March 2024!

If I can get it back to $80 and then $85 I will be back in a good position to handle other emergencies. I will also expand that buffer by $5 a month. What I do with the rest is another financial plan in itself.

So HBD savings target for the next while are:

April - $85
May - $90
June - $95
July - $100

Slow and steady. It is getting to the point where more than a dollar of that $5 increase is coming from the interest of the Savings, Which is great. Did you know that you need $300 HBD savings to earn $5 a month in interest?

So… I am on my way to regaining the financial reserves that I spent recently… and I have a plan to grow and expand this reserve so I can handle problems easier!

Thank you for reading this post!

Cheers!
@zakludick

Hive South Africa