Establishing an Emergency Savings Account

An important component of your budget is to save for emergencies. I am not talking about saving three months of income. I am talking about socking away $1000.00 to $1500.00 into a separate emergency savings account. This is not a huge goal for you to begin and accomplish. Even if you cannot fund the entire account today, open a savings account with the first $100.00 or whatever you can afford.

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Then keep contributing to this account until you hit your target amount. My advice is to treat this just as you would any other bill. Setup this account to be automatically funded.

Why have an emergency savings account?

If you need a brake job for your car, or your washer crashes and burns having an emergency fund is going to save you a great deal of money instead of having to fund these types of expenses on your credit card.

Some Do's and Dont's