9-1-1 – – – What’s your Emergency Fund?

Dave Ramsey has played a significant role in shaping our views and methods on reaching financial freedom, and we follow his rule on the creation and maintenance of an emergency fund. It is one of the most important aspects of our budgeting. Some of you may currently have nada in your savings, and some may have a few thousand. Like Ramsey, we suggest putting $1,000 in your emergency fund until you’ve paid off all of your debt.  After you pay off your debt, you can set up an emergency fund that covers 3-6 months of expenses.  One thousand dollars will cover most emergencies.  Emergencies are defined as SURPRISES —car or home repairs, anything that is unforeseeable and out of your control.  Some people may feel like $1,000 is way too little to have in an emergency fund.  Remember that you are trying to pay off debt, so you don’t want to sit on thousands of dollars while interest is being added to your debt every day.  If you don’t have $1,000 in your emergency fund, save up for that BEFORE starting to pay off any debt.  If you have over $1,000 in your emergency fund, dump all of that extra onto a debt and watch how relieved you feel!!

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