Have you ever had an expense that you could not pay for? Maybe someone fell and broke their arm and you did not have enough money for the medical bills. Or maybe your refrigerator needed repaired and you did not have the money to pay for the repair.
And yes, both of those things needed paid for…so you just put it on your credit card.
Have you ever lost your job? Or, has your spouse lost their job? What did you do? Did you panic because you did not have the money to pay your bills? Not enough money to feed your family? Not enough money to keep your house?
If any of those things (or similar) has happened to you then you already know the benefits of having an emergency fund. What is an emergency fund you ask?
Or, what happens when unexpected things happen – like a world wide virus?
Yup – as simple as that.
An emergency fund is money that you set aside for all of those ‘just in case' scenarios. It is money that you set aside so that you do NOT have to add to your debt. (I am on a personal mission to help everyone live a debt FREE life).
It is money that you set aside so that when those unexpected expenses happen (and they definitely will) you don't immediately go into stress mode. You can step back and say ‘I got the cash for this!' Which, in my humble opinion, is one of the best feelings in the world.
There are the medical emergency ones. There are the home repair ones. And there are the ones that you use when you lose your job or get sick and can't work.
→ For this article – I am talking about the emergency fund that you need if you can't work.
First – save $1000.
Why $1000? Because you gotta start somewhere, right? $1000 will cover most of those little unexpected emergencies. New tires. New battery. Refrigerator repairs. Medical testing.
Make sure that you set it aside in a Cash Envelope, savings account, or other area that won't get touched for other things.
Are you wondering how to even begin to save $1000 when you are stretched so thin right now? Please read ‘40 Ways to Save Money NOW‘. You will definitely find a few things you can use to save that cash.
Second – save 6-9 months of living expenses.
What if you lost your job? Or, if you are living on 2 incomes, what if your spouse lost their job? How would you pay the bills?
You need to set aside enough cash to live on for 6-9 months…this will save you from going into more debt and gives you or your spouse ample time to find a new job.
For a more in depth look at Emergency Fund savings take a look at: ‘Budgeting for the Unexpected.
Go on and grab the FREE download below. It includes calculators and trackers just for you!
It's funny how we can turn non- emergencies into emergencies. Our minds just want to trick us all the time. Here are a few NON emergencies:
Don't let YOUR mind trick you into thinking that any of the above (PLUS so many more) are emergencies. If you can live without it…it is not an emergency.
As a budget counselor…
I am passionate about budgets and becoming debt free so that you can live your best life. Your best debt free life. I have so many posts relating to money – check them out right HERE.
Enjoy the process. It might take some time. But, I promise, you will be thankful that you put money into your emergency fund.
PLUS, I have tons of great articles to help you. Check them out here: Jane's Budgets and Money Tips and Tricks
My favorite Budgets & Money posts are:
Don't let let the circumstances of YOUR life determine who you really are? Choose YOU instead! Not sure how to do that? Let me help!
A few Joyful Living posts for you to read!