Life can throw you a curve ball when you least expect it, and it can prove to be costly. Whether it is a broken water heater or a sudden change in your life, having an emergency fund can help you through the difficult time. Without emergency savings stashed away, you might otherwise have to rely on borrowing money or use credit cards, which can cost even more in interest. Learn more about the importance of having an emergency fund and how to set yours up. It only takes a little bit of discipline and a few dollars to get started.
Prepare for the Unexpected With an Emergency Fund
From Jeremy Vohwinkle, About.com GuideAugust 28, 2007
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How true indeed. Everyone has a rainy day. Some of us more than one or two. When those rainy days come about, stay away from credit cards and bank loans. Reach inside that pillow that is ear marked for “rainy day”. You’ll be glad you did… believe me.
Good words of advice, but would like to see a recommendation of how much to “aim” for in this emergency fund.
KK, in the article linked to in this entry I cover some targets to aim for when creating an emergency fund. For most it is between three and six months worth of expenses, but depending on your financial situation it may be slightly more or less.