Emergency Fund
Emergencies by nature happen when we least expect them, and often at an inconvenient time. From a minor emergency like a car or home repair, to more serious emergencies like a medical issue or unemployment, handling the emergency becomes easier when you’re prepared financially. There’s nothing worse than adding a financial burden to an already difficult situation.
Fortunately, it is possible to help your future self and reduce the impact a potential emergency can have by creating an emergency fund. This means saving money that you will only use toward that “rainy day,” when you really need it.
How much money do you need to set aside for your emergency fund?
Many financial experts recommend saving about three to six months’ worth of total expenses.
In other words, money enough to pay all the bills for a few months to half a year, in case you are unable to work or have a sudden, large expense.
That may seem like a lot of money, but it’s possible to achieve this savings goal if you save a little at a time.
How much money do you need to set aside for your emergency fund?
Many financial experts recommend saving about three to six months’ worth of total expenses.
In other words, money enough to pay all the bills for a few months to half a year, in case you are unable to work or have a sudden, large expense.
That may seem like a lot of money, but it’s possible to achieve this savings goal if you save a little at a time.
