The Importance of Having an Emergency Fund
Posted on | February 19, 2009 | No Comments
Okay, I will admit it; I am not crazy about a lot of the financial guru’s due to the fact that many of them treat their callers badly. However, with that said, there are a lot of good things that can be learned from these people if you were never taught by your parents or some other good friend or soul along the way. One of the first things that everyone should have is an emergency fund. Though when you here that you need six months worth of savings put back it can become something that is totally unobtainable and some people just give up thinking it can never be done!
What I have heard suggested as an alternative to the six months (though eventually, six months should be the goal) is to start with a goal of $1,000 because most emergencies can be covered with $1,000. These are the car repairs, HVAC breaking down, plumbing issues, etc. that are real, true emergencies! Not dinner with friends, a new dinning room table, etc. Then put X amount of dollars every paycheck into the fund and slowly grow it over time. This allows you the ability to pay for the emergencies out of your fund instead of a credit card. Once you spend out of the fund, pay it back as a monthly payment until it has been paid back in full just like you would have to if it were a credit card; without the interest.
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