Emergency Fund

RECENT NEWS
Sydney Morning Herald  Feb 13  Comment 
Queensland MP and businessman Clive Palmer is calling for a national emergency fund to provide speedier relief for businesses and communities following natural disasters or industry crises.     
Wall Street Journal  Dec 4  Comment 
New research weighs the trade-offs between playing it safe and trying to grow that cushion.
USAToday.com  Sep 24  Comment 
Ask Matt: Create an emergency fund of three months worth of living expenses in cash.
Forbes  Sep 10  Comment 
If you don’t have an emergency fund yet, don’t freak out about it. Just get started.
The Hindu Business Line  Jul 22  Comment 
  A majority of households in Ahmedabad do not set aside funds to meet emergency expenses, according to a recent study by Assocham.The Associated Chambers of Commerce and Industry of...
Wall Street Journal  May 9  Comment 
Besides keeping some in an emergency fund, should the average investor have an allocation to cash and cash equivalents in an investment portfolio? The Experts weigh in.
The Hindu Business Line  Dec 8  Comment 
Clearing credit card bills early, using salary bonus to partly pay off loans and an emergency fund can keep the vicious cycle of debt at bay.
The Globe and Mail  Dec 8  Comment 
Having an emergency fund is one thing, but having funds you can access in any emergency is another
The Australian  Dec 6  Comment 
GINA Rinehart is keeping her billionaire counterparts guessing, not yet committing to Ten's $230 million emergency fund raising.
Forbes  Oct 24  Comment 
Saving up your hard-earned cash to stash away an emergency fund?




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In life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.

Financial emergencies can come in the form of a job loss, significant medical expenses, home or auto repairs or something you’ve never dreamed of. The last thing you want to do is be forced to rely on credit cards or a loan which could simply compound the problem.

==How Big Should Your Emergency Fund Be?== $100000.00

Most experts agree that you should keep between three and six months worth of your living expenses set aside in your emergency fund. Depending on your specific situation and whether or not you have children, carry substantial debt and types of insurance coverage will determine what amount is best for you. cash loans


The reason you want to have three to six months of expenses saved up is that the most common reason for the need of an emergency fund is due to a sudden loss of income. If you or your spouse loses a job you still have bills to pay and it may take a few months to find suitable new employment. It is best to plan for a worst-case scenario so that the smaller emergencies such as replacing the hot water heater that just went out will be easily covered.


Where should you store your emergency fund? bank account

You should be earning interest from your savings or you are losing value due to the effects of inflation, but this is not a priority for your emergency fund. Consider placing your emergency fund into a liquid money market account (MMA). Most of the time, MMAs will provide you with a special checkbook so you can have immediate access to your money in an emergency situation. It is not recommended to use your emergency fund to purchase certificates of deposits (CDs) or Treasury Bonds due to the lack of liquidity or early sale penalties. It is also not recommended that you use your emergency fund to purchase mutual funds, stocks, etc... Even though most are more liquid than CDs and Bonds, the risk and variations in the market are too great to entrust your emergency fund.

When setting up an emergency fund, you will want to open up a separate account so that the emergency fund money isn't mixed in with your regular spending money since mixing makes it much easier to spend the emergency fund money on nonemergency things.

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