Life happens, which is a good reason to incorporate a fund for unexpected life events. Some financial gurus suggest establishing an…
Rainy Days Still Happen
Life happens, which is a good reason to incorporate a fund for unexpected life events. Some financial gurus suggest establishing an emergency fund that is worth $500–$1000 dollars, but the exact dollar number really depends on your needs. Though, I will say that in today’s world $1000 dollars can disappear pretty fast. One car expenditure or medical bill can wipe a $1000 dollar fund clean–several times over. A job loss can cause further stress that can easily be avoided if precautionary actions are taken. I suggest establishing a fund that totals to 3–6 months of your regular monthly living expenses. If you have 3–6 months saved up, you can ensure that most inconveniences that come about can be quickly solved. A 3–6 month emergency fund does not guarantee freedom from unexpected situations, but it most definitely ensures that many of the unexpected situations that do occur are less financially stressful. Decide today what one month of your total living expenses is and multiply that 3–6 times. After you do this, work on putting this total amount in a separate account that you only touch for emergency situations. If you find this amount of money to be too tempting to not touch, then put this money in an account that is not easily accessible.