Wednesday, October 13

Tag: Emergency Fund

How Important to Have an Emergency Fund?

How Important to Have an Emergency Fund?

Finance
There is a financial concept that says "pay yourself first". This concept is very common in Dave Ramsey's Debt Free and Simple Plan. You pay bills first, then you pay yourself, and then you pay your rent or mortgage. If you don't have an emergency fund then you're paying yourself last. If you have an emergency fund then you're taking your bills and paying them, and not only that but you're paying your budget before you pay your self. The first part of most of his plans only teaches you to pay yourself first, but not always for everyone. What's the emergency fund? The emergency fund is a fund you have that is two or three times your monthly non-dischargeable income. This doesn't mean it should be an amount equal to three months of expenses, just enough to cover that amount of mone...