I don’t know about you, but before we were out of debt (except our house) I couldn’t imagine having the suggested three to six months of expenses in the bank. When your budget comes down to pennies every month, it’s a hard thing to fathom. Impossible really. It seems if people let there finances get to that point, they probably aren’t dreaming anymore, about anything. Esspecially, working their dream job, cash free vacations, retirement, or paying for their kids college. At that point, getting by is all they can think of. Sad. If you haven’t figured it out yet, that’s no way to live.
Most people don’t have an emergency fund and just use their credit cards…Uh oh.
‘We’ve done leart that lesson, haven’t we…’
Ben sings this song sometimes. I think we can all identify.
Cut the credit cards up and get yourself a rainy day fund, because the storms clouds are brewing and it’s gonna rain.
What is an emergency fund, anyway? It’s three to six months of expenses in a savings account, money market, under your mattress, or where ever, JUST NOT INVESTED. You have to be able to get your hands on it. As Dave Ramsey says, this is insurance, not an investment.
What are expenses? The things you have to spend money on in a month to get by. Mortgage, utilities, food, gas, and transportation. (Gym memberships, clothing, entertainment, that sort of thing I don’t include in this.)
What’s an emergency? This is the hardest answer. You and your spouse have to decide together what a true emergency is. Write it down and promise you’ll stay out of it until you have a true emergency. (I’m telling ya, rain is in the forecast.)
Our definition of emergency is…loss of job, loss of spouse, auto break down, house problem, medical emergency, or family emergency (death/trip).
What it’s not…I need a new Yates Banjo, fund. I’m tired of cooking, let’s go out to eat, fund. Kimber just came out with a new pistol, fund. The kids want a PS3, fund. If you buy another gun, I’m gonna buy LOTS of diamonds, fund. I need a new Ranger Bass Boat, fund. I need to go to Alaska for a week, fund. Dang, Christmas came in December this year, fund. I need…
Well, you get the idea.
Get your life back by starting an emergency fund. A thousand dollars is a great place to start.
Simply,
Sis
Tags: emergency fund, manage money, rainy day fund, saving money, three to six months of expenses
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