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Don't be caught off guard
Life is full of unplanned surprises, but you can still be prepared for the unexpected by having at least 3-6 months' worth of essential expenses saved in an emergency fund. Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or high-interest loans.
When a sudden expense pops up, it can often feel like an emergency, but to avoid unnecessarily dipping into your savings, ask yourself:
- Is it unexpected?
- Is it necessary?
- Is it urgent?
Emergency Savings First
Here are a few reasons why emergency savings should come first:
- Peace of mind: Having a solid emergency fund in place can help you sleep better at night, knowing that you have a safety net in case of an unexpected expense.
- Protection against debt: If you don't have emergency savings, you may turn to credit cards or loans to cover unexpected expenses, which can quickly spiral into debt.
- Flexibility: With an emergency fund in place, you have more flexibility to make decisions about your financial future, such as taking on a new job or starting a new business.
How Much do I Need for Emergencies?
Your emergency fund should be liquid, meaning you need to keep it in a place where you can get to it easily and quickly...but to avoid the temptation, a place that's not too easy to access. Use this calculator to help determine how much you need to set aside monthly or as a lump sum to create an emergency fund.
Calculator
Need Help Saving?
Speak with one of our Financial Planners today! Sentinel can help you...no matter what life throws your way!
