10/27/2022
In life, unexpected expenses are bound to come up, often at the most inconvenient times. If you haven’t been diligent in preparing for these events, they can add a ton of stress to your life. However, if you’ll Plan Ahead and set up an emergency fund to be used on unexpected expenses, you can face life head-on knowing you can handle whatever comes your way!
Start by setting up a savings account specifically to hold your emergency fund money. Choose the amount that you would like to save each month, then set up an automatic transfer for this amount into your new savings account. (The automatic transfer ensures that you don’t forget to add the designated amount to your emergency fund each month, and alleviates the temptation to keep it in your checking account to be spent.)
From there, watch as your emergency fund grows each month and DO NOT TOUCH IT unless an absolutely necessary unexpected expense comes up that cannot be paid from your regular spending money. Keep in mind, this account is NOT for holidays, vehicles or travel. It is strictly for necessary unexpected expenses.
Continue to add to your emergency fund, with the initial goal of acquiring the amount equal to 3 months of living expenses. Once that initial goal is reached, continue to add to the account until you have the amount equal to 6 months of living expenses.
When an event occurs that causes you to have to use money from the emergency fund, resume automatic transfers as you did initially until you have built the account back up to the full amount.
Working to keep the amount of 6 months of living expenses available at all times will ensure that you will be financially prepared for just about anything life can throw at you!
