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Buidling Your Emergency Fund
Emergencies happen. Cars break down. Kids get sick. People lose jobs. Those are simple facts of life. It’s not a matter of if they happen -- it’s more of when. Don’t act like a victim when life happens to you, but instead be prepared.
Add a rainy day fund to you budget. If you don’t have one at all, start out with a goal of having $1,000 set aside, continuing the spending freeze until you do. Then, after you've paid off consumer debt, increase that goal to having three months’ of living expenses set aside. When you’re completely debt-free and building up retirement savings as well, increase that goal to six months or more. In a tough economy like this one, especially if your job isn’t secure, you may want to save up to twelve months’ of living expenses.
Building up savings and paying down debt is a true balancing act. Here is a great article to read to better understand the order in which you should be paying things down and building certain accounts: Couples can navigate around perils of debt - USATODAY.com
*I love this!! The boyfriend and I did taxes today! We are saving what we're getting back! It's around a months living expense, so I will feel soooooooooo much better!
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