Broke? Here’s How to Create a $1,000 Emergency Fund

Picture this – You get laid off. Your car break downs. Someone gets sick. You are broke. These are all reasons you need an emergency fund.

These are bleak scenarios that no one wants to imagine happening to themselves, but will you be financially prepared if it ever did? If not, then now is the time to start building your emergency fund.

An emergency fund or rainy day fund is money you set aside to prepare for unforeseen expenses or emergencies. This is money you can use when you need money desperately.

What Is an Emergency Fund?

Emergency funds are an essential part of any financial plan. They provide a cushion in case of unexpected expenses or emergencies.

Why Is an Emergency Fund Important?

While the 3 to 6-month recommendation is a good rule of thumb, consider it a minimum baseline and do your assessment to determine how much money you may need in an emergency.

How Much Money Should Your Emergency Fund Have?

The more dependents you have, the more money you would need in the case of an emergency. You can set a goal of a fixed amount per member of your household or simply choose to save a percentage of your salary.

How Many Dependents Do You Have?

Your savings goal will need to be different if you have college tuition to pay for versus if you have a newborn child. A similar consideration is if you have elderly parents with medical expenses.

What's The Age of Your Dependents?

If you are a multi-income household, the risk of losing all sources of income at the same time is lower.

How Many Sources of Income Do You Have in Your Household?

Swipe up to learn more!