R&I – FS
We’ve been taught to expect the unexpected, and when it comes to finances, the best way to do that is with an emergency fund.
An emergency fund contains cash for unforeseen moments “that throw your life into financial uncertainty and disarray,” said Rebecca Jarvis, ABC News’ chief business and economics correspondent. These could include a death in the family, a debilitating illness, a divorce or a job loss.
Jarvis points out that emergency funds should be for “hurricanes” as opposed to “rainy day” inconveniences such as car repairs or broken appliances or phones.
“You want to look at your weekly budget — how much are you spending on food and groceries? What is the cost of electricity and utilities? How much do you have to pay for rent or your mortgage? These are all necessities, things that you would have to make payments on in order to keep the status quo,” Jarvis said.
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As far as contributing toward your emergency fund, Jarvis suggests making it a part of your budget.
“Give a little to that emergency fund every week, every month, until you get to the point where you have those six months of savings on hand,” she said, further suggesting tracking and celebrating your progress along the way.
And if you’re carrying a lot of debt, Jarvis recommends building your emergency savings, even if you have to scale back on debt payments.
FoundingFrog
Article URL : https://abcnews.go.com/GMA/Living/fit-finance-build-emergency-fund-save-avoid-spending/story?id=75279322