Emergency Fund

RECENT NEWS
Motley Fool  Nov 18  Comment 
It's not just working Americans who need backup cash on hand. Retirees need emergency savings as well.
Clusterstock  Nov 8  Comment 
From home-buying affordability guides to pre-wedding financial wisdom , there's a ton of money advice out there. And while much of it is helpful, some tips can be detrimental.  There's one particular nugget of advice that Sallie Krawcheck, a...
Motley Fool  Oct 23  Comment 
Spend a little time thinking about the best ways in which you can spend any available dollars and you'll likely be happy you did. Here are five sound suggestions.
Motley Fool  Oct 7  Comment 
Your emergency savings should be enough to cover three to six months of living costs, so don't forget to factor these three expenses into the equation.
MedPage Today  Sep 10  Comment 
(MedPage Today) -- CDC, NIH press Congress to create a public health emergency fund
Motley Fool  Sep 10  Comment 
We're told to save three to six months' worth of living expenses in case an emergency strikes, but this rule doesn't apply to everyone.
MedPage Today  Sep 9  Comment 
(MedPage Today) -- Would help take politics out of combating diseases like Zika, they say
Clusterstock  Sep 2  Comment 
Bulking up your savings is difficult. Between paying down debt, staying on top of bills, and keeping up with daily expenses, it's hard to resist the temptation to dip into that emergency fund when something comes up — even if it's not...
Forbes  Aug 22  Comment 
A core aspect of financial planning is risk management, which can be accomplished by diversifying investments, limiting fixed expenses, purchasing insurance, and maintaining an emergency fund. Most people use their savings and checking accounts to...




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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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