Having Emergency Fund Can Save Your Life

Live a life without a credit card if you want to free yourself from any financial crisis

. Most financial experts recommend that you set aside funds as an emergency reserve. Having enough funds for any unexpected events will spare you from any debts.

Putting aside a little extra cash in cases of emergency is always a right thing to do. How much money should you want to keep? This would probably the next question on your mind. A minimal amount should be enough to supply you daily needs for at least 3 months but if you can make it more than that like 12 months or more, I think other financial planners will not disagree.

Personal circumstances are factors that must be taken into account. What it takes to provide you with peaceful mind will give you an idea on how careful you should be. If your parents are well-off who are always willing to support you during a financial crisis, it will be enough for you to have an emergency savings for at least 90 days. Using your credit card, you will end up saving money for at least 6 months to pay off the 15 percent interest. Avoid using credit card to pay for another credit card or for loans such as mortgage loan for a Santa Maria real estate home and car loan.

After paying off your credited card debt, you can start to contribute to your 401K. 401K will allow you to borrow money. That is the essential of following this step. You can start setting up your emergency funds after.

It is also important to monitor how much money you have spent and how much you have saved every month. Compute the total earnings that you have earned for a month and subtract it to the total expenses for the whole month as well. Expenses may include mortgage loan for your home in Santa Maria real estate.

Doing this will give you a clear action plan that could help you increase savings. Unexpected funds like bonuses, promotion and any other sources should be included as a part of your savings.

Self- discipline is also a great help. Only buy the things which are primarily needed. Avoid buying things you do not need. Always spend your cash wisely.

Keep you emergency funds safe and accessible at all times. Do not gamble. Do not invest in stocks whose worth may decrease by the time you need it.

Putting your emergency funds in the bank would be the best thing to do. Open a savings account to a trusted bank. It is important to know the banks history. Know the bank policies like the insurance, interest and the other terms.

Never stop until you know that your fund is sufficient enough to supply your daily needs in a certain period of time. By then you can enjoy life with no worries about your future.

by: Hugh y taylor

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