![]() ![]() Where should you put the money?Įmergency savings are best placed in an interest-bearing bank account, such as a money market or interest-bearing savings account, that can be accessed easily without taxes or penalties. You may also want to consider adjusting the amount based on your bill obligations, family needs, job stability, or other factors. This amount can seem daunting at first, but the idea is to put a small amount away each week or two to build up to that goal. While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months’ worth of expenses. Instead, this fund serves as a safety net, only to be tapped when an emergency occurs. It shouldn’t be considered a nest egg or calculated as part of a long-term savings plan for college tuition, a new car, or a vacation. ![]() What is an emergency fund?Īn emergency fund is a separate savings or bank account used to cover or offset the expense of an unforeseen situation. While emergencies can’t always be avoided, having emergency savings can take some of the financial sting out of dealing with these unexpected events. A sudden illness or accident, unexpected job loss, or even a surprise home or car repair can devastate your family’s day-to-day cash flow if you aren’t prepared. When they happen, they can derail your financial stability. Emergencies, by their nature, are unpredictable. ![]()
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