Hope you have had a wonderful month and are ready to begin Summer festivities. This month I thought I would focus on what goes in an Emergency Fund.
According to Dave Ramsey, an emergency fund should include at least 3 to 6 months of living expenses. The fund should have 6 months of living expenses if there is only one spouse working. In addition to this, I have thought of some other things that should be included in the account:
- All quarterly and yearly expenses: each year/quarter you know that you will have to pay for homeowner’s insurance, car insurance, license and registration for your vehicles, renter’s insurance, oil changes etc. Think of events that you know are going to happen and plan accordingly by saving for them throughout the year.
- Emergencies: deductibles for car or home in case of a car accident or storm.
- Car Maintenance such as tires, engines, mile service and more.
- Home maintenance such as pest control, fence replacement, plumbing and electrical needs.
- Vacations: if you are planning to take a trip within the year or two, plan accordingly by pricing your lodging, food, travel and souvenirs up front and save for them throughout the years.
- Gifts: birthdays, anniversaries, baby showers, graduations, congratulations, and being a blessing to someone in need. These events are likely to happen, set aside a few dollars each month for them so that when they occur you aren’t altering your budget in order to be a blessing.
Hope you find these tips helpful,