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How to Save Up Money for an Emergency Fund
When my friend bought his first house, he had no idea flooding didn’t fall under his home owners insurance. A hurricane came through and damaged his floor, windows and wiring. Without an emergency fund saved up to cover the damage, he had to fix up the wiring himself and lived with boarded up windows and warped floors for months before he managed to afford the repairs.
Whether you’re facing an unexpected hospital bill, a layoff or a really expensive speeding ticket, when you’re in fight or flight mode, the last thing you want to do is make a financial decision that could impact you for years.
Luckily, we can prepare for the twists and turns life throws our way. Emergency funds, savings accounts that you only touch when you need to pay for large, unexpected expenses, can keep a bad situation from becoming an impossible one.
A well-maintained emergency fund ensures that you have enough money to cover anywhere from 3 months to 1 year of essential expenses. Of course, you won’t get there overnight. You may want to start by saving $1,000. This may not cover everything, but it can buy you enough time to do some research, call-in reinforcements and figure out the best path forward.
