According to Money Magazine, 78% of Americans will have a major negative financial event in any given 10-year period such as:
- You are unexpectedly laid off from your job
- You owe a bigger tax bill than you had anticipated
- Your car is totaled in an accident
- You are hospitalized from a devastating illness
- Your apartment is burglarized of most of your possessions that are uninsured
These are just a few of the myriad of possibilities that can wreak havoc with your life making it next to impossible to recover financially without an emergency fund. Even worse if you should have to file for bankruptcy… making your credit worthiness a moot point.
In order to prevent a financial disaster in the making, commit to having a 3-6 months’ worth of savings in a separate account. A savings account may be too easily accessible which would be tempting to take money out so be sure to find an account where you can easily obtain your money within 24 to 48 hours. Your financial consultant would be able to help you find an account that would work best in your situation.
Now that you have seen some very important reasons of why you need an emergency fund, let’s look at a few ways to get started.
- Determine your monthly expenses and multiply by either 3 months or 6 months, whichever you prefer or start out with a goal of 3 months and once you met that goal repeat it for another 3 months.
- Calculate how much you can put away each month and then treat it like a bill by making regular monthly payments.
- Find creative ways to add money to your emergency fund:
- Did you get a tax refund?
- How about that Holiday bonus?
- Do some freelance work
- What about those bottles of pennies or coins? These can really add up!
- Be committed to creatively save each and every day!
Once you get started, you will be amazed at how easy it is to build your emergency fund; all you need is a strategy and an objective to meet your goal for financial freedom.
Make it a great day!
Marla J. Blanchard
MJB’s Bookkeeping Solutions
Don’t keep me a secret, if you know someone who could use a bit of Bookkeeping TLC let them know that they are not alone and have them call me 805-764-1MJB (1652).