Emergency Fund

RECENT NEWS
New York Times  May 24  Comment 
Diplomats approved the creation of a $100 million fund to help the World Health Organization respond rapidly to emergencies.
NPR  May 21  Comment 
The World Health Organization isn't ready for the next pandemic or international health crisis, so the agency's leader is calling for major reforms. But will the changes be enough?
Clusterstock  May 12  Comment 
Greece's cash situation is looking increasingly grim after the country used an  emergency fund it has contributed to over decades to make a debt payment of €750 million (£538 million; $845 million) to the International Monetary Fund...
Motley Fool  Mar 2  Comment 
The majority of Americans have some money saved for an emergency, but how much is enough?
Reuters  Feb 16  Comment 
Presidents from the 10-nation Economic Community of Central African States (CEEAC) pledged in an extraordinary meeting on Monday to create an $87 million emergency fund to fight the Islamist militant group Boko Haram.
DailyFinance  Oct 1  Comment 
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DailyFinance  Sep 11  Comment 
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Motley Fool  Aug 16  Comment 
Many people know they should have some cash set aside "just in case", but don't really know how much they'll actually need to live.
Market Intelligence Center  Jul 14  Comment 
I’m sure you’ve heard of it - the Emergency Fund that personal finance gurus promote.  Regardless of whether or not you’re a die-hard Dave Ramsey fan, one thing remains true: Everyone should have an emergency fund.   So, what is an...
Motley Fool  Jun 29  Comment 
Sound strategies for planning for the unexpected.




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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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