Are you Saving For a Rainy Day?
Having a dedicated fund helps you weather financial storms, like job loss or unforeseen expenses. In this cheat sheet you get a simple tool to calculate how much you will need in your Freedom Fund. Take the first step towards financial peace of mind.
As a mentor to beginner investors, I always stress the importance of starting with an emergency fund. An emergency fund is a savings account where you set aside money that you only use in case of… you’ve got it right: an emergency. For example, losing your job, needing to get the car repaired or replacing something in your home.
To help you determine the ideal amount for your fund, I’ve created a “Emergency Fund Cheat Sheet” and this resource breaks down the process step-by-step, ensuring you have a clear understanding of your financial needs.
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How much money you have to save in an emergency fund varies but a rule of thumb is 3-6 month to cover expenses depending on your circumstances and if you have responsibilities like kids.
It’s important to regularly put money into this savings account and you can setup an automated monthly transfer from your main account to the emergency fund or manually transfer a larger amount occasionally (my preference). You know yourself best.
Let me break it further down, how you find out how much you need: Start by looking at your expenses (necessities only). Mortgage or rent, insurances, cell phone bill, transportation and find out what you would spend on groceries if you lost your job which is likely a lower amount than if you have a job.
Tickets to the movies, travel expenses and take-out are not necessities (sorryyy). The exercise here is to find out what amount you need in order to get by. The easiest way to find your monthly expenses is to download or print out your bank statements and start adding the numbers.
I’ve created a “Emergency Fund Cheat Sheet” and this resource breaks down the process step-by-step, ensuring you have a clear understanding of your financial needs. By providing your email you get the cheat sheet and subscribe to my weekly newsletter. Zero spam in your inbox, of course. Only gems of knowledge and my best, professional, and personal tips on how to invest for long-term wealth. You can subscribe at any time using the link in the email.
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