Crazy junk happens. It’s just a fact of life. I’m about to ask you a scary question. Are you ready?
What would happen if you were not allowed to work for three months? Of course, you’d still have all the usual expenses. You’d have your rent/mortgage, utilities, groceries, etc. Would you be panicking at that point? Would you run to the credit cards?
I recently met a man who was wrongfully accused of misbehavior at work. Because of this, he told me that he might be fired. He said, “I don’t know what I’m going to do.” I asked, “Do you have an emergency fund?” He replied, “If I would have known that this was going to happen, I would have piled up cash.”
It’s a scary time for that guy. He’s genuinely afraid. Seems like when it rains it pours.
Become your own insurance policy! Get an emergency fund fast. You never know what crazy junk life might throw your way. I recommend piling up enough money to cover 6-months of your normal expenses. I’m working on this for myself right now, and it gives great piece of mind to know that money is available if needed. Why go into debt to cover something you could have planned for? Seriously, you can plan for the unknown by throwing money into your savings account.
Some people ask if they should put this money into a CD or investment account. No. You need this money to be liquid. You will need access to it fast when crisis strikes. It’s really boring, but it protects you like nothing else.
The more money you have, the better! You don’t have to go overboard, but seriously do this. One idea for saving money is to add a dollar to your piggy bank every time you make a transaction. You’ll gain a lot of money for your emergency fund that way. But do this only after you put everything you possibly can into this emergency fund! You want to add a great deal of upfront money.
So next time your car breaks down, that sneaky bill comes in the mail, or you trip and crack your nose . . . you’ll be ready!
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