THUNDER BAY – Business – Nothing in life ever happens the way you expect it, and knowing that we should prepare for the unexpected. Given that, all we can do is prepare for emergencies by having additional funds put aside if that situation arises. Financial emergencies can stem from a job loss, home or auto repairs, or even medical expenses from illness or injury. Relying on credit cards and loans will only make the problem worse.
How much should I keep in my emergency fund?
It’s best to keep about 6 months of savings in the emergency fund even if it’s more than you’d likely need. The reason for 6 months of savings is because financial emergencies are always incurring more expenses than most of us would expect. It’s best to plan for the worst-case scenario that way you have much more than you’ll need should that event occur.
Starting the fund
Building up 6 month emergency fund will take some time, so don’t fret. The key is to starting small and put a little bit of money away from each pay cheque. If you start your goals with small amounts they’re more attainable and manageable. You can set it up so it’s weekly, bi-weekly or even monthly depending on what’s best for you. Once it is setup to save automatically you won’t even think about it.
Where to keep the fund
Start with a savings account because it is easy and generally won’t cost you anything. As your account grows you’ll want it somewhere that can generate even a little bit of interest if possible. Some options are money market accounts or high interest savings accounts.
Keeping the money somewhere that is liquid is important as you want to be able to have access to those funds if an emergency does happen.
The Bottom Line
Being prepared for the unexpected ahead of time will make emergency situations much easier to deal with. You’ll feel better and more comfortable financially when you know you’re prepared. Should you have any other questions about emergency funds, do not hesitate to contact me by email or phone.
If you would like to sign up for my free monthly investment newsletter, feel free to email me at anthony.talarico@f55f.com with your name and email.
Anthony M. Talarico
Financial Security & Investment Representative
W: 807-343-4788 C: 807-472-6092
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