Everyone knows they need an emergency savings fund. Knowing how to get started is trickier. With seemingly every penny going toward a bill, putting something extra away can be hard. Still, it is absolutely important. Today’s Voice of the Expert, Patricia Jimenez, the Hispanic Outreach Manager for Consumer Credit Counseling Service of Greater Atlanta, tells us how much you should aim to save and how to do it.
TIPS FOR EMERGENCY SAVINGS
Creating an emergency savings fund is a challenge for many people. But at CCCS of Greater Atlanta we advise that everyone should regularly save at least some portion of their paycheck.
Without an emergency fund in place, what will you do if your car breaks down and you need a down payment for an auto loan to replace it? How long could you make ends meet if you lost your job?
The first step to starting a savings plan is to create a monthly budget – an accurate accounting of your income and expenses. For some people it is helpful to carry a small notepad with them for a month so they can immediately record each expense. After doing this for a month, most people can find instances when they spent money on things that can be cut out without a big sacrifice.
Once you have determined to save a set amount every month, here are some strategies to create an emergency fund of three to six months of monthly expenses that allow you to be properly prepared in case of a financial emergency.
When people suffer a job loss or incur an unexpected expense, going into debt can make matters worse. That is why building an emergency fund is an important way to maintain control of your finances even when life throws you a curve.
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