Every adult who is gainfully employed should strive to have an emergency fund of at least $1000, if not more. Why? Lots of surprise expenses can come out of the blue and if you don’t have the cash and it is an emergency chances are you will use your credit card or line of credit once again putting you in the red.
One of my cats who is now long gone, was bit by my roommate’s cat between her anal glands. She formed an abscess and had to have emergency surgery due to the location and it cost me $800 – this was back in 2008, so price would likely be higher now. The bill went on my visa with little thought.
They say if you were to not have a car you would save $9000 in one year. I am not sure if this cost is based on gas, payments and insurance alone, but I know my friends are doling out a lot of cash when an issue comes up with their vehicle.
You never know what is going to hit you financially, so to avoid an exceptionally rough month, it is best to have an emergency stash. The different expenses which can arise are endless. You don’t want to be at the mercy of a credit card you won’t be able to pay off by the end of the month.
Agreed! Having money in the bank accruing interest is the best. It will help you rest well at night, knowing that if something unexpected happens that the cash is there for you, you won’t have to borrow money from a bank or a put it on a credit card.
You can do it! Set a goal for $1000 minimally, even if you can only put $50 in a pay or less, just do what you can and do not touch the money. And running out of wine is not an emergency.
Peace & love – Rachel