Mellody: First, let me say this: starting an emergency fund should not be stressful – it should help give you peace of mind, because it is putting you in a better financial position over time. In that spirit, the biggest thing to remember is simply to start with what you can afford, even if it is small.
If you save $25 per month, by the end of a year you will have $300, which can go a long way toward a car repair or some other unexpected expense. Once you have determined what you can afford, make it automatic – simply have it deducted from your paycheck or your checking account each month and placed into a separate savings account that you do not touch.
One last thing – what should be our goal?
Mellody: Ideally, you really want to try to accumulate enough money to cover 3 months of expenses – that means rent or mortgage, groceries, car payment – everything. Once you get there, you want to continue to build that up. if you save enough money to cover 6 months expenses, keep saving, but just try to put saved money towards your retirement!
Monday Mondays: The Importance Of An Emergency Fund was originally published on blackamericaweb.com