Emergency Fund

Life is unpredictable. It is critical to plan for the unexpected. An Emergency Fund can give you some peace of mind when an issue pops up.

You should focus on building an emergency fund even before you pay off consumer debt. Start with a goal of $1000. Then work to eventually save 3-6 months of expenses. 

Keep your emergency fund somewhere accessible, like your local bank or in a money market account. Ideally, it would be earning more than the typical savings account. But make sure you only use it for emergencies!

Having a budget in place is key to establishing and maintaining your emergency fund. You should include a line in your budget to refill the Emergency Fund. If your budget does not allow for saving, you’ll need to decrease expenses or seek out new sources of income.

We cannot predict when unexpected things will happen, but we know they will! A little discipline and planning ahead can turn a big problem into a minor inconvenience.