My grandma always had a coffee can on top of the fridge with cash in it – saving for a rainy day. 🙂 My hubby’s grandma used to stuff her extra cash in socks. We have a couple of jars around the house to collect spare change and a couple of dollars now and then. Everyone likes the idea of having a couple of bucks stashed away.
Dave suggests that the first thing you do, even before budgeting or paying off debt, is to build an emergency fund of $1,000 as quickly as possible. Now, if you have ever been through any of the situations I used as examples yesterday, you know that most likely won’t cover it all, but just think how much easier it would be to have that (that will cover most deductibles).
Then, after you have been working your budget and you have successfully paid off all debt (except the mortgage), it’s a good idea to add to that emergency fund. Dave suggests enough to cover 3-6 months of living expenses. This would be huge help in facing any financial trial. Can you feel the freedom in that?!?
Remember when you use money from these emergency funds, they must be replenished. There is no point in doing all that work in the beginning, if you are not going to keep up with it. Here are some great suggestions for how to come up with that first $1,000 FAST. 🙂
|Build An Emergency Fund Fast|
So, where do you put the money that you save?? We use a simple savings account, which is great because it’s easily accessible. As you grow a larger emergency fund you may want to look into something with a higher yielding interest rate like a money market account. Always consider how accessible you need the money to be, and find an account that suits those needs. The more your money can make money the better!!