Posted by admin in How much of an emergency fund do you currently have right now? Do you even have an emergency fund? The problem that most people face is not that they don’t have an emergency fund, it is that they don’t have any idea how to build one. What you must understand is that an emergency fund is a savings account but should not be treated quite like one, you need to keep it separate and never use it unless it is an emergency. The trick to building up an emergency fund is to first understand what it is there for.
An emergency is not when you need a new pair of shoes, a new purse, or even to go on vacation. An emergency is when your car breaks down and you need to get it fixed so you can go to work, when the water heater needs to be replaced, and even when you have to go to the hospital for some unexpected surgery. Now that you know what an emergency fund is for it is time to build it up and the best way to do that is to give yourself a running start. What I would suggest doing is to build your emergency fund to at leas6 months of expenses that way if you were to lose your job or couldn’t go to work for a while you won’t not have to worry all that much. The best way to get money in an emergency fund account is to first start off by putting in at least half of 1 months expenses right off the bat. Just know that the more you can put in the emergency fund now the better off you will be later on. My recommendation no matter what is that you need to start today with your emergency fund because you never know when you might need it.