Money Talk With Slater

Making Money Across the Board

Monthly archives "November 2018"

The Importance of Having an Emergency Fund 

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Your emergency fund can cover your expenses if you lose your job unexpectedly.

Your future self will thank you for creating an emergency fund now. It’s vital to set aside emergency savings can help you get in case your home requires an emergency repair or something more serious such as losing your job.

Having an emergency fund is one of the most critical things you can do. It’s part of adulting. Your savings must be able to cover your big expenses for three to five months.

Having a solid emergency fund gives you peace of mind. No one wants to live from paycheck to paycheck and not being able to pay the rent or a car repair away from not being able to get to the j-o-b.

It also offers you freedom. If you decide to leave a relationship or your boss gets so unbearable that you have to leave before finding another job or you want to go back to school or begin your own business, having an emergency fund gives you the freedom to do these things.

Keeping that money apart from the money you use to pay bills can help curb frivolous spending.

Sometimes when you see a huge number in your checking account you get a little big-headed a little more irresponsible Keeping the money separate can help you evade temptation.

What is an Emergency?

You must only dip into your emergency funds for a true emergency, such as to keep yourself afloat between jobs, for an auto repair, a medical expense, or a home repair. You can’t use your emergency fund for things such as a shopping spree, to buy a new cell phone or laptop, or to go on vacation.

How Much Should You Save?

Your emergency fund has to be 3-5 months of expenses. That sounds like a lot and it is but remembers, that number can be your bare-bones cost. If you were to lose your job your spending would be different than it is when you have money constantly coming in.