Emergency savings more important than ever
Prepare yourself for the unexpected
The COVID-19 pandemic is testing the strength of our financial plans.
Right now, it’s not hard to imagine possible threats to our personal finances – losing our income, a family member getting ill. These thoughts have kept many of us awake at night.
The idea of something expensive and beyond your control happening becomes less threatening if you are properly prepared.
Having sufficient insurance coverage is important but is not enough. We also need to have emergency savings.
As a rule, I recommend saving three to six months’ worth of income.
It may be overwhelming to think about saving that much, but focus on an attainable amount, such as $1,000, and start saving a portion of your income toward that goal.
Many people think they don’t need to save that much because they know their current lifestyle includes a significant amount of unnecessary consumption.
Their hope is that in a crisis, they can adopt a simple lifestyle and spend less. This is easier said than done, and often gets us into unwanted debt.
Emergency savings will allow you to enjoy peace of mind, knowing that you’ll be able to pay for those unforeseen but inevitable expenses.
A simple lifestyle can help us gain control of our finances and puts us in a better position to save for emergencies.
And having a healthy emergency savings fund can give us the freedom to live more simply, focusing our energy on family and home while knowing we have an emergency backup.
Start your emergency savings today!