Experts advise an emergency fund to cover six months of living expenses. Few people have that, but what about enough set aside for a more modest emergency?
Set a goal for yourself … $1,000 in the bank … just in case‼️
That brings us to a question I’m often asked: Why do financial advisors insist clients establish an emergency fund? After all, that cash will likely sit in a low-interest checking or savings account, where it lags behind inflation. You might be wondering whether the money could be put to better use by, say, paying down debt or investing through a brokerage account. My response: No matter how good your financial plan, the steady progress you’ve made over the years could come to a screeching halt if times turn bad. A financial emergency is just that—an emergency. Often, the bills are high and need to be paid promptly. If you put off payments, you could wreck your credit score, get hit with financial penalties and you might be charged hefty amounts of interest. This can leave you in a financial hole that’s difficult to escape.
Source: Cash Is King – HumbleDollar