Hi friend! I wanted to talk to you today about something that is so important! So important that it should be at the top of your priority list!
So important that if you don’t do this, it could make or break you.
Have you ever opened up a medical bill and thought how in the world am I going to pay this? Or have you ever had an emergency, like a flat tire or your washing machine, leaked and now you gotta come up with extra money to fix the damage? But, you don’t have any extra money? So you end up putting it on a credit card or the situation just gets worse and worse because you can’t afford to fix it?
Your emergency may be different, but I bet you’ve had one if you haven’t yet you will! Trust me an emergency will happen.
And according to CNBC 57 Million Americans have no emergency fund and when an emergency strikes, they won’t be ready.
I am not telling you this to judge you because I use to be there. I am telling you this because it’s so important! Not being prepared for emergencies lead us to have our bank account frozen. Yes, they can do that! I am sharing this with you because I do not want this to happen to you!
You can not prevent emergencies, they will come, but you can be financially prepared for them. Yes, even if you have no money left after payday, you can have an emergency fund. I will show you how to accomplish this.
THE FIRST THING YOU NEED TO KNOW
I know I just said it, but emergencies will happen. They will, it is up to you to be prepared for it. When it comes down to it, you are the only one who can provide for your family. You are the one responsible for making sure your kids have food if you or your spouse is out of work. No one else will do that for you. Not knowing how you’re going to buy food for your family, is a horrible feeling.
Of course, being out of work is not the only reason to have an emergency fund. A few other reasons you should have an emergency fund are:
- An emergency fund will help you if your car suddenly breaks down, and you need a new engine. (this happened to us) Or any other sudden repairs that you weren’t expecting.
- Having an emergency fund when medical bills start coming in is also important. Even if your insurance is relatively good, medical expenses add up. Especially if you have a sudden emergency that may require more than just a visit to the doctor.
- If you own your own home, it is good to have an emergency fund. You are responsible if your washing machine starts leaking or the dishwasher suddenly starts pouring water everywhere and you need a new one. You will need a way to get money fast.
- An emergency fund is good to have if you have a family member who lives far away and becomes ill. You may want to go see them. If you don’t have the money it would be difficult to travel.
- If you’re pregnant, you may end up being out of work for a while or your spouse may need to stay home with you. You’re going to need money.
I could go on and on and come up with a thousand reasons why you need to have an emergency fund. The point is, you will eventually need one. An emergency fund is always great to have.
After several years of not having one and lots of emergencies later. I finally have one. Knowing that you have money put away just in case you need it, gives you so much peace of mind. When an emergency does strike, you will be able to focus on the situation and not cause yourself and your family more stress.
HOW MUCH DO YOU NEED IN AN EMERGENCY FUND?
The answer to this questions will be different for everyone. However, I recommend starting off with a small goal. $500-$1000. Give yourself a set goal and time to have it funded. You will be surprised at how much peace of mind you will have just knowing you have a few extra hundred dollars in the bank. Start small and work your way up.
YOU MAY BE ASKING YOURSELF WHERE AM I GOING TO GET MONEY FOR AN EMERGENCY FUND
I know just paying your bills is probably tough for you right now. I am not saying you need to let your electric bill slide so you can fund your emergency fund, that would be silly. But, I really think you should sit down and evaluate your finances. See where you can pull an extra $10 from and put it to the side. You should also think about your daily life, are there some things you could be doing differently to help you save money? My husband took a 30% pay cut, we were forced to re-evaluate our finances. Right here are a few changes we made in our lives that really helped.
Related article to saving for your emergency fund
My advice is to start small. If all you can come up with right now is $10 that’s ok. You just need to start saving. If you make a few changes you might be surprised at how much you can save.
WHERE SHOULD YOU KEEP YOUR EMERGENCY MONEY?
The ideal place to keep your emergency fund is somewhere you can get to it fairly quickly and somewhere you can’t get to it immediately so you’re less tempted to spend it. I personally keep our emergency fund in whats called a High Yield Savings Account. The money is where I can get it if I need it and it draws a little more interest than a regular savings account. However, if your great with money and you know you won’t spend it on unnecessary things, you could keep it in a regular savings account. It is very important to make sure you won’t spend it on things that are not emergencies. Having your money where you can’t get to it with the swipe of a card, gives you time to think before you buy.
Are you currently one of the 57 million Americans that don’t have an emergencies fund? If so that’s ok, there is no better time to start then right now! Let me know if the comments if you have any questions. I am here to help you.
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