Create an Emergency Fund

Do you have money set aside for things like job loss, illness or even a repair on the car you need for your work?

If you do, then you know all about something called an emergency fund. If not, or you’ve been putting off starting one then here are some easy tips so you can take that first step.

Emergency Funds are Vital

An emergency fund is a budget smart person’s best friend.

One of the top reasons to have one is you’ll less to have to rely on using a credit card and getting into debt which if you’re in the middle of a crisis like an illness or job loss that much worse.

How Much Should I Have in My Emergency Fund?

Everyone is different and how much you save and put away in your fun depends on your financial situation.

Let’s begin by asking this question, what’s your current income and how hard will be for you to replace it?

Most financial experts suggest having at least six months of living expenses to help you through critical times.

Where Should I Put My Emergency Fund

You always need easy access to the money so a regular bank account is the best home for your money or better yet a savings account so you can even earn some money on your investment. And remember this is an investment in your future so treat it as such.

Check out credit unions because they often have no fees for both checking and savings accounts.

How Do I Build My Emergency Fund?

First, you need to add it to your budget. Consider this expense a mandatory fixed amount. If you can have it withheld from your pay, so much the better.

Every time you get a raise you can add this amount to either your emergency fund or your long-term savings.

If that isn’t possible right now, try putting loose change in a jar and when it’s full, take it to the bank. Even put money you save from using coupons or rebates into the jar.

How about trying to cut expenses so that you can build an emergency fund?

If you must, get an extra job or become an independent contractor to add some income to your fund.

If you get a tax refund, save it in your emergency fund every single year.

Let’s start building that emergency fund today.