San Antonio – When, not if, you will have a financial emergency such as major home repairs, medical bills, or losing your job. It helps soften the financial blows of life that could be.
Lisa Gill of Consumer Reports said: “Having a fallout fund to cover these types of unplanned expenses can protect you from large debts that can easily turn into a financial crisis. You can,’ he said.
Many financial planners say a good rule of thumb is to set aside enough money to cover essential expenses for three to six months.
“This is for housing, food, transportation, and debt repayment,” said financial planner Nestor Vargas. Calculate how much money you should put aside for the fund.”
If your income isn’t stable or you’re retired, six months is a good rule of thumb for professionals.
Once you’ve set your savings goals, don’t let the numbers intimidate you.
“It’s definitely important to start saving as much as possible. Even if it’s $5 or $10 a month, you’ll be surprised how quickly it adds up,” says Vargas.
An online savings calculator such as Dinkytown.net will tell you how much you need to save each month to reach your goals and how quickly that money will grow.
Consumer Reports suggests putting that money in a high-yield savings bank or penalty-free certificate of deposit. Many of those accounts now have interest rates above 4%.
You can make saving easier by setting up automatic deposits or transfers from your checking account to your emergency fund. Track your contributions and keep them safe until you need them.
If you have other urgent financial obligations, such as high-interest credit card debt, Consumer Reports says paying that debt should be your priority. , you can balance a portion of your savings with repayments and an emergency fund with the rest. For more information about paying off credit card debt, visit CR.org.
Copyright 2023 by KSAT – All rights reserved.