Anybody who knows me knows that while I’m no pessimist, I definitely am a plan-ahead-for-the-worst kind of guy. You know, bring two sweaters, four bottles of water, and a snack “just in case” when I’m going somewhere. I think it’s smart to always be aware of what the worst case scenario is, and have a plan for it, even if you are an optimistic, positive thinking person like I am. That’s why I really like this article posted in the Personal Finance Olympics section of GoBankingRates.com, which gives some great tips and advice for consumers to build up an emergency fund the right way so that it’s available in the worst of times:
“Too many American consumers have found themselves surprised by an emergency and caught in a very tough financial situation. Building an emergency fund should be everyone’s new financial priority because you never know when the bad times are going to show up, or just how awful they’ll be.
Your car could need a new battery, after years of running fine. Your child might need to see an out-of-network medical specialist and only 20 percent of the bill will be covered by your health insurance. Or, you might need to fly out for an unexpected family funeral.”
Click here to read about the five key steps for building up an accessible and hefty emergency fund.
Especially the part about paying off debt if you ever want to be able to truly save, that’s great advice. I also like the tip of setting up electronic, automated transfers so that you don’t even miss the money (I do that myself.) If anybody has any other tips for starting and building an emergency fund, feel free to post them here!