A larger emergency fund (e.g., 9 to 12 months) may be warranted if your income is variable or uncertain.Ĭredit cards generally have very high interest rates (typically 15-25% APR) and that is a pretty big deal. ![]() Treat your emergency fund right and it will return the favor.įor most people, 3 to 6 months of expenses is good. If you need to draw from your emergency fund at any time, your first priority as soon as you get back on your feet should be to replenish it. Unexpected travel, essential appliance replacement, and sudden medical procedures are all user-submitted examples of emergency funds in action. Step 1: Build an emergency fundĪn emergency fund should be a relatively liquid sum of money that you don't touch unless something unexpected comes up. Secure retirement? Buy a house? Save for a car? We'll get to specifics on how to save for these a little later on. ![]() Once your budget is figured out, you need to figure out what your goals are. Housing costs, utilities, and basic sustenance are harder to eliminate than "entertainment," eating out, or clothing expenses.įree online tools (like and Personal Capital) or spreadsheets like those found in the Wiki's Tools page can help you track your expenses. You should minimize your expenses to the extent practical. Budgeting helps you see your sources of income less your expenses. Step 0: Budget and reduce expenses, set realistic goalsįundamental to a sound financial footing is knowing where your money is going. Graphical version The flowchart Non-US versions If you have suggestions about this article, please message the moderators.ĭo the steps in order and don't skip steps that apply to you. This incorporates general guidance found in the PF Wiki and that is given often by /r/personalfinance regulars.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |