Emergency Fund

Money doesn’t buy happiness, but it is a factor in determining how happy you are. I’m not suggesting that you need a million dollars, but having a cushion account and not living paycheck to paycheck is a must. For the longest time I was irresponsible with my finances and told myself I would start saving after I paid off my debts. Then I realized that I am ALWAYS going to have a bill to pay off – whether it be a credit card or car loan now or a mortgage later. So I started an “emergency fund” with an online bank (I recommend going to www.bankrate.com for the most up-to-date rates). I chose an online institution to open my savings account (such as Ally Bank, ING or Smartypig ) as opposed to my primary bank, because I can set up how much I want transferred on a weekly or bi-weekly basis. Once I had done that, the money I was saving was out of sight and out of mind. As I began to become comfortable having money transferred to my emergency savings account, I started to add other savings goals along the way; such as a holiday fund or car maintenance fund. It’s a good feeling to know that you have an extra cushion for emergencies. Saving may not be fun in the beginning, but it truly pays off in the end.