Do you have an emergency savings account?
Top financial experts recommend saving $1000 in a savings or money market account to weather financial storms before you do anything else. If you encounter a financial storm, the $1000 may just help you avoid using a credit card to repair your car, fix or replace the washing machine or some other unplanned expense.
Financial storm
Yesterday evening I encountered a financial storm only to be rescued by my emergency savings account! I tried to drive our SUV into the garage and discovered a strange noise coming from under the hood. I decided to restart it (sort of like a computer reboot) thinking it would resolve the issue, but it didn’t work. Thinking it might be the battery (that’s as far as my car knowledge takes me) I hooked up the jumper cables to our other car.
Although it restarted, it soon stalled. Long story short, after a tow to the repair shop and a call this morning from the mechanic; I encountered a financial storm of just over $500 for a new alternator and some other maintenance.
Use a credit card?
Pull out the credit card and pay? No way! Fortunately, we had the emergency savings to cover the expense.
If you’re tracking along without an emergency savings of at least a $1000 and you have debt you’re trying to snowball, consider stopping the snowball until you have the savings. It could prevent you from using a credit card for a storm and increasing your debt. Financial storms happen to everyone, so you’re at risk if you don’t have the savings.
What financial storms have you encountered and did your emergency savings come to the rescue?
