Personal Finance 101–EmergenCies Happen

It is important to plan for the unplanned or the unexpected. Creating an emergency savings account to help pay the cost of unplanned expenses is vital to any financial game plan. The emergency savings account should be separate from all other bank accounts. When searching for an institution to house emergency funds find a place that does not charge extra for having multiple accounts.

To get started, saving begin by creating a small emergency account of $1000. Dave Ramsey is a big proponent of start with a small emergency savings account. Once this account is fully funded with $1000 then continue saving until the value of the account can cover at least three months of living expenses. This way “when” something does happen enough money will be reserved to keep us from using other forms of money, like credit cards.