If You Don’t Have One Of These, Then You’re Living Your Life In Risk
An emergency fund can help us through job losses, medical expenses, and even home or auto repairs.
If you don't have an emergency fund, start one today. Here are six tips to help you set money aside so you’re not saddled with debt the next time you need some extra cash.
Separate your emergency fund
Don’t use your primary checking account to hold your emergency fund. Why? Because it’s too easy to spend it that way on things that aren’t true emergencies.
Make it a goal to save at least three months of living expense
As a minimum, try to save three months of living expenses in your savings account. Your living expenses include everything that you spend money on, including your rent or mortgage, food, gas, insurance and discretionary spending. Everything.
Yes, over-saving is a thing. Saving too much of an emergency fund can reduce our wealth-building potential. Why? Because money that we save in our e-fund isn’t invested.
Start small and save what you can
If you can only save $50 a week for a while, then do that. That's okay. But if you can save more, save more. The key here is to start with whatever you can, then slowly increase the amount that you’re saving as you make more money (or reduce your expenses).
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