Perhaps figuring out what an emergency fund is can best be accomplished by looking at what it is not. An emergency fund is not for a new dress or pair of shoes, it is not for a lavish vacation, and it should not be used for daily trips to the spa or golf outings. An emergency fund is a fund of money, set aside for use when your car breaks down or when your roof springs a leak. Life has a way of throwing us curveballs, and the more you are prepared, the better.
An emergency fund is something everyone should have. Some things to remember when starting an emergency fund are:
- Continually contribute to the fund, on a regular basis. This is the only way you will be able to grow an account that is there for you in the event of an unplanned event.
- The fund should contain enough money to pay your bills for 3 to 6 months.
- Opening a separate savings or investment account is a good way to keep the money earmarked for emergency uses.
Setting up an emergency fund should be a part of your financial plan. The money can be used in times of unemployment, natural disasters, or other unexpected circumstances. Having an emergency fund allows you to maintain your lifestyle, without going into debt. It is no fun to make monthly loan payments, and never see any progress. Using funds from an emergency account will help you to avoid falling into that trap. If you have questions about how to start an emergency fund, or need help managing your current debt load, call our office.
Call a Plantation, Florida debt relief attorney today for more information about emergency funds and why you need one. We can help you develop a budget that works, and explain your legal options if your budget has fallen apart. We can also put you on the path to financial success, starting with saving for emergencies.