Prepare for the Unexpected with an Emergency Fund
When the unexpected happens, many people find themselves between a rock and a hard spot, financially speaking. Don’t leave yourself open to this type of situation. Being one step ahead will pay off.
An Emergency Fund Can Get You Out of Deep Waters
The healthy, responsible thing to do when it comes to your finances, is to always think ahead of the circumstances rather than just live in the moment. You might be doing wonderfully today, as financially stable as you’ve ever been, but what does the future hold? No one can tell you that. This is why you should be prepared in case tomorrow paints a completely different picture, in case a financial emergency strikes.
Lay Out All Your Financial Responsibilities
It is recommended that you keep anywhere from three to six months worth of your living expenses saved up as part of your emergency fund. How do you know how much that is? You keep track of these items, list them and then calculate how much you spend monthly. Consider others living with you, so you can make a more accurate calculation. You can break it down into categories, like basic living expenses, such as groceries, personal items, housing, transportation, insurance, debts, healthcare, etc.
Open a Savings Account
Although, it might be tempting to start saving on your own, in the old school way, the best way to do it is to open a savings account. When you save cash, you are more likely to spend it before you need to. Once you’ve built up a nice amount, you can consider a different type of account that offers better interest rates, so you can make money while you save money.
Take Little Steps to Build Your Emergency Fund
Ok, so now you know how much you should have saved up. If you think about the big number, it can certainly be overwhelming. To start saving money, you just have to start somewhere, you don’t need to start big. Saving up the entire amount will not happen overnight, Start with manageable amounts that make it easier to reach short-term goals. You can adjust the amount as you go.
Don’t put yourself and your family in a position where you’re at risk. Always be ahead of the game, so you can navigate through tough times. Also, make sure you have the best insurance coverage you can get, to make your life easier during difficult situations. Contact an AAI insurance agent today.