What is finance?

The emergency fund is a cash reserve in case an emergency situation leading to income loss should occur. In general, it is recommended that individuals or families save from three months of life on the savings account to stay above the water after losing employment or unexpected main costs. This savings account is referred to as an emergency fund and should not affect unless necessary.

You want to start an emergency fund that will protect against future money problems, start by opening a separate savings account in the bank. Determine the amount of money that can be regularly stored on your account, whether two weeks or monthly. It may be necessary to carefully examine your expenses to determine where the restrictions can be carried out. It may therefore be beneficial to set the automatic selection from the current account to the savings account every time the payout is saved. This will cause the money to be less noticeable, especially if it is a relatively dark percentage that is added up over time.

It is also necessary to determine the amount of money that JSou needed to survive for a period of time. Again, take careful accounts of monthly expenses and choose costs such as food, mortgage, gas, medicines and food that are absolutely necessary and add them. The emergency fund should be able to cover at least three months of these needs.

Keep in mind that the state of the emergency fund may take years. It is important to finance the pension account at the same time, especially if the company offers some type of program corresponding to contributions. In addition, those who have a high amount of credit card debt may first want to focus on paying it. This is because it does not make a big financial sense to have thousands of dollars sitting in the emergency fund, only three percentage interest, while credit card companies charge 18 percent of interest or more for high balance.

There are many advantages that have an emergency fund. If the work is lost, there will beMedical emergency or house needs expensive repairs, the emergency fund can be used without having to choose a loan on the credit card or start high balances. Careful money management and regular assessment of expenditure can go a long way to finance the future of a person. The emergency fund is just one part of successful finances, but many people believe it is the most important part that will protect against the disaster.