What is an emergency fund? It is cash that you have saved up just to settle some unexpected events or accidents that life hands to you. How much should you have in an emergency fund? That depends more on your current situation, such as being self-employed or employed in a high turnover industry, but one guideline that I like to follow is around 8 months of expenses, which I got from Suze Orman. More on why and what an emergency fund should be made of will be covered in this blog post.
(Image source: http://www.inc.com/magazine/201405/alexa-von-tobel/need-for-freedom-fund-savings-living-expenses.html)
Why is an emergency fund so important?
There are many accidents or events that may be able to throw your life into disarray if you do not keep some spare savings. Some of the events that may arise include:
- Retrenchment
- Medical Emergency
- Car Accidents
- Household Appliance Spoiling
These events would definitely affect your ...
...
