A lot of the stress in people’s lives comes from living on the edge financially. Your car has an oil leak and the mechanic says it’ll cost $1,800 to fix it. A medical problem comes up unexpectedly and your health insurance deductible is $1,300.
Worrying about how to pay for expenses like that creates stress and worry, sometimes even panic. You can almost eliminate those routine stresses in your life by having an emergency fund.
An emergency fund is money you set aside so you can fix the car when it breaks down. You can deal with unexpected medical bills. Life throws you a curve ball and you say – no problem. It’s not the end of the world.
I wish it hadn’t happened that’s for sure. But I’ll just write the check and take care of it.
Time to get it fixed and move on.
Dave Ramsey says you should start your emergency fund with $1,000 then work it up to about three to six months of expenses. I’m okay with making your starter version of your emergency fund bigger, depending on your income, but get it going now.
You’ll never live without it once you have one.
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