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Be prepared! Isn’t that what they always say?
You should be prepared for emergencies.
The title of this post should say Money Saving (Life Saving) Emergency Fund!
Life takes us on a crazy ride sometimes and when there are downs there seem to be lots of downs. And emergencies take money.
The emergencies I am talking about aren’t those beautiful red heels or that outfit you need for so and so’s party. I am not talking about sports equipment on sale or a trip to Vegas for the weekend to blow off steam. I am talking real emergencies like the car breaking down or a family member getting sick or you have lost your job and the rent needs to be paid.
Where will the money come from to pay all these things?
The credit card, right? NO! If you have setup and saved an emergency fund it is there to help you when you are in need. You can get the car fixed, pay your rent, help a family member in the hospital. An emergency fund can help you. It is your rainy day fund so you don’t go into debt.
Plan for it to snow! And you will need a shovel!
I live up north in a coastal community and we get cold wet weather and usually a few days of snow in January or February. This year we got quite the snow storm in December and the story I found most interesting was that the hardware stores were selling out of snow supplies the day of the storm. Not the days leading up to the storm, but the day of. People were actually heading to the hardware store in ice and snow in summer tires to get shovels and salt. Be prepared you need a shovel if you live where it snows! Be prepared you need an emergency fund. It’s life it will throw you a curve ball.
Emergency funds aren’t hard to create.
You just need to remember that they are for real emergencies. The fund needs to be in a location you can get to if you need it. A separate savings or checking account at your local bank will work. Do not invest your emergency fund or lock it into a savings plan. You want this money available when you need it!
$1000 this is what you need.
Your goal is to set up an emergency fun of a $1000. Why $1000 because it will cover most small emergencies. Granted you are the best source of your life’s information if you need more than a $1000 or less than $1000 for your emergency fund you make that choice.
Yes, you can save $1000 or sell or raise $1000 to get that emergency fund started. You can take an extra job or side job, sell a few things you don’t need anymore, return your empty bottles, cut coupons and save money. You can raise $1000. Think about it this way wouldn’t you rather like knowing you have the funds to fix the car or take care of your family if something goes wrong instead of adding more debt to the pile. You can save $1000.
Look around the house what big items can you sell? Can you have a garage sale and sell a bunch of small items. Could you take an extra shift this week and next? Could you cut back on the meals out or the entertainment? Could you cut coupons, buy generic and shop sales to save money? Yes you can!
Once you have your $1000 emergency fund set up you can breathe. But….
Give yourself a pat on the back you now have an emergency fund you are partially protected. By partially and what I mean by but…. I mean now that you have your basic emergency fund set up you should gradually continue saving money to cover 3-6 months worth of costs. I don’t mean rush and sell everything unless you think you are going to lose your job or need that sudden influx of money. Over a period of time pre-selected by you start setting aside money to cover what would be your household costs for 3-6 months.
Don’t dip into this money for shopping or vacations, have willpower. This money will be there to protect you if something real bad happens, you won’t have to go into debt to protect yourself. This money could be there to help you during job loss. It could cover the bills while you get back on your feet and find new employment. This money could be there to help if your basic emergency fund doesn’t cover the cost of the “emergency”. You have the power over your money let it help you in your time of need. Work toward saving 3-6 months worth of living expense funds.
Money saving inspiration.
If you are looking for more money saving inspiration checkout the book that changed the way I think of money and what helped me set up my emergency fund The Total Money Makeover.
You can save for an emergency fund. You can achieve your goals.
Have an amazing day.