The When, Why, And How Of Emergency Funds
An emergency fund is an important piece of personal finance that can ensure your financial stability in the event of an emergency. Being caught without an emergency fund can leave you scrambling when trying to pay for unexpected problems. Be prepared for anything and keep these FAQ’s about emergency funds in mind when considering your own emergency fund.
When should you start an emergency fund?
You should start an emergency fund as soon as you are old enough to have to take on the financial burden of an emergency. If you are financially responsible for yourself, than an emergency fund is a good idea.
When should you use your emergency fund?
This tends to depend on the individual, but the general guidelines are that you use your emergency fund for any life-changing event that you cannot plan for. This includes obvious emergencies like hospitalization or job loss, but it also includes less obvious emergencies like car problems. When figuring out your own personal guidelines, think about your personal absolute necessities to determine what will qualify as an emergency to use your fund.
How much should you set aside in your emergency fund?
Experts tend to recommend that you set aside between 3 and 6 months’ worth of living expenses. While this is recommended, it really depends on your financial situation and your personal needs. Ironically, the worse your financial situation, the more you should try to have set aside because an emergency can set you back in a big way.
Contact the Gregory Insurance Group in Dallas for all of your Texas insurance needs. Keep yourself and your loved ones safe in the event of an emergency, with an emergency fund. Let us keep you protected, and give us a call today!