What is in your Emergency Fund?
Everyone should have emergency savings, whether you are making $20k a year or $400k a year. Emergency funds are great to have in case of loss of a job, unexpected illness or an unexpected expense. The key to having emergency funds is to cover your monthly living expenses or prevent you from invading your living expenses to pay that unexpected bill.
The idea of saving for six months is outdated. Our economy has changed over the past ten years, and inflation is to blame. Six months of savings it is now equal to about two months of savings. You will need to look at several factors to set up a sufficient emergency savings fund. Here are three areas to include in deciding to set up an emergency fund.
What is your career?
Your career will determine how much you need in your emergency savings. Take a look at the time frame for hiring in your industry, turn over rate, and salaries. These areas will help you determine if you need to put away six months or a year worth of finances. If the hiring process takes more than six months in your industry, then you want to make sure you have money to support the long hiatus from work. This is also helpful if you're going to change careers.
How much do I owe you?
You may think of what your bills are monthly and put away that amount as an emergency fund. No! Take a look at your statements for the entire year. You can take a look at your previous year reports for electric, water, and gas to determine how much to put away for emergency savings. You want to factor in the cost of any other credit bills you have for the year. You want to have a realistic picture of what you need to maintain your lifestyle.
Girls they want to have fun!
You are probably thinking FUN! You are planning for the inevitable. You are not Sandra Bullock in the movie Birdbox (netflix.com). You are not going to stay indoors blindfolded all year. You may have a habit of taking vacations once or twice a year. Put a little fun away in your emergency fund. A fun vacation includes travel, food, entertainment, shopping, and lodging. Create a total that will cover all expenses without worry.
These are a few ways to try and build your emergency fund. The key here is to keep your worry and stress levels low so; you can focus on recovering from the unexpected event that occurred. You can start building this emergency fund at any time, start. You may not have all you desired to save, but having something in savings will be helpful. Unexpected events happen all the time.
Here is a free worksheet to help you total your emergency savings. Click here to access freebie http://bit.ly/ersavings. Once you have completed worksheet, let me know your number go to www.facebook.com/coinstrategist8. For more tips and strategies for your personal and business money management, visit samathatalks.com.
SamanthaTalks is an entrepreneur, author and financial strategist for female entrepreneurs. Samantha has revolutionized money management for female entrepreneurs. She teaches them how to effectively manage money in their personal and business, resulting in them building secure financial futures. She is featured weekly on a radio show in Dallas, contributor to Untold Chronicles magazine, and speaks internationally.