How to Manage When Life is Full Of Expensive Surprises
Unfortunately we often don’t consider emergency funds until it’s too late. So go ahead and start working on yours today.
You don’t have to have 6 months of mortgage payments in the bank by the end of the week, but why not shoot for $1000 in your emergency fund by the end of 3 months. Yes, it will be hard and you may even have to give up those daily Frappuccino’s (or pedicures), but when something happens that you weren’t expecting you won’t have to pull out the credit card!
Dave Ramsey, author of The Total Money Makeover, recommends keeping 3-6 months of expenses in savings. He suggests keeping your emergency fund in a money market account from a mutual fund company so you can earn money while it sits. Although he also cautions his readers to remember that these funds are not an investment, but insurance.
This type of insurance doesn’t just protect your from the unexpected, it also gives you peace of mind. Money issues can be very stressful, and having an emergency fund can make you and your spouse feel more financially secure.
What more can you do or what can you go without to add a little bit to your emergency fund each week? Let’s share ideas.
[photo by Picture Perfect Pose]