🛡️ Why You Need an Emergency Fund
An emergency fund is money set aside for unexpected expenses like medical bills, car repairs, job loss, or urgent home repairs. It prevents you from going into debt when life throws curveballs. Most experts recommend 3-6 months of essential expenses, but start with a $1,000 starter fund!
- •Starter fund: $1,000 for immediate emergencies
- •Full fund: 3-6 months of essential expenses
- •Essential expenses: Rent, food, utilities, insurance, minimum debt payments
- •Keep it in a high-yield savings account - accessible but separate
💰 Building Your Fund
Calculate your monthly essential expenses, then multiply by 3-6 to get your target. Start small - even $25-50 per month adds up! Automate transfers so you don't have to think about it. Once you reach your goal, keep contributing to account for inflation and growing expenses.
- •Calculate: Monthly essentials × 3-6 months = target amount
- •Start with $1,000, then build to full amount
- •Automate monthly contributions
- •Only use for true emergencies - not wants
- •Replenish immediately after using it