Emergency Fund

Establish An Emergency Fund

When my wife and I decided to get out of consumer and credit card debt eight years ago, the first thing we did was establish an emergency fund. Our reasoning, based on the awesome book – The Total Money Makeover – was quite simple. We wanted to be able to deal with unforeseen expenses without adding to our credit card debt. We needed a cash-reserve. When we started out, we had about $500 in our online savings account, so we decided on an even $1000 as a goal, for a mini-emergency fund.  Over the time it took for us to get out of debt, we accessed (and rebuilt) our emergency fund (say that five times fast) on two different occasions. …

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Emergency Fund

Quickly Fund $1000 Emergency Fund

When my wife and I decided to get out of debt, the first thing we did, after creating a zero-based budget, was to fund a $1000 emergency fund.  We then put our credit cards in the back of our wallets – and began the real process of paying down our debt. Open a savings account.  If you don’t already have a savings account – now’s the time to open one.  Personally, I’m a big fan of both the Ally Bank Savings Account.  An online savings account allows for easy access to funds – and easily connects to your local bank for transfers. Have a garage or yard sale.  I know it sounds a little old fashioned, but a garage or…

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Emergency Fund

The Emergency Fund

Savings.  Rainy-day Fund.  Cash Reserves. The Emergency Fund.  It goes by many names, and whatever you want to call it, ours helped us to get out of debt. Why we established an emergency fund before attacking our debt – When we first decided to start paying off our consumer debt, we were pumped.  It would have been very easy for us to have used every extra dollar to reduce our debts.  However, we were concerned about emergencies – those unplanned-for expenses with which we must all deal. So, even before we began to attack our debt, we funded an emergency fund.  Having a small amount of cash reserves removed the necessity of using a credit card and proved invaluable to…

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