I once read something that said most people are just an emergency away from being homeless. It's a scary thought, but it really does take only one unforseen situation (losing a job or an illness) for a lot of people to find themselves in dire financial straits.
Are you prepared?
The Idea: Begin creating an emergency fund for 3-6 months of your living expenses. Keep this fund in a separate account from the rest of your savings/checking. I recommend an online account. Your living expenses include all the bills you currently pay now: rent/mortgage, car payment, utilities, student loan (although you may be able to defer these payments), groceries, etc.
You're probably wondering where the money to create your emergency fund is going to come from. Well, we've already identified a few areas in previous Good Fridays:
- The fees you could save by re-evaluating your bank
- Earning extra cash that you dedicate directly to your emergency fund.
- The money you save by prioritizing your needs over your wants.
We'll have more opportunities to add to your emergency fund throughout this year's Good Friday.
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