Each of the items mentioned above can be very fun and exciting reasons to save money. With some financial discipline, you will be able to achieve those goals. However, let’s not forget about the necessity of having an emergency savings account.
In life, it is SO easy to focus on achieving big financial goals that help you obtain certain tangible items such as a vehicle or a home, that we tend to forget about the importance of the “What if…?” Establishing an emergency savings account needs to be a priority. The “What if…?” can be for numerous types of emergencies, unplanned and unforeseen circumstances can become financially costly situations.
How will you handle it if you lose your job, or you receive a pay reduction?
How will you afford to make major vehicle repairs if the need arises?
If you are sick and miss a few weeks of work with zero pay, it will hurt! You’ll lose income and need to pay medical expenses.
What if you need home repairs because your air conditioning unit died in the middle of summer?
Those are just four of the major financial curveballs that life throws our way. But how do we hit those curveballs out of the park when they occur? Most financial experts recommend that you have three to six months of your monthly living expenses in your emergency savings account.
Does your savings account suddenly have enough money because you know how much you need? Absolutely not! However, with careful planning, budgeting, and financial discipline, it will happen and the next few pages will teach you more on this subject.