I’m an optimistic guy by nature.
While I’m positive, I’m also realistic.
Here are 2 points to consider:
78% of people will have a major negative event in a 10 year period. Somebody is going to have an accident or get sick.
Unfortunately, according to Forbes, 63% of Americans couldn’t handle a $500 emergency.
The solution for this is to build an emergency or rainy day fund.
Before getting into what constitutes a rainy day fund, here is what I’m not talking about:
- Savings for a new home
- A new toy that you want
- A last minute vacation
I’m talking about things like:
- A flat tire
- A pipe bursting
- A medical emergency
Not being prepared for something like this can derail your financial plans. I know this from experience.
I also know what it’s like to have a plan in place and the peace of mind knowing that we’re going to be OK when these things occur.
The good news is to build it slowly.
You’ll want to get that first $500 – $1000 in the bank and then work up to 3-6 months.
Most emergencies bigger than that would be covered by insurance.
People often ask me where to put the emergency money. I usually recommend a money market account.
If you need help establishing a rainy day fund or any other financial goals, hit reply and let’s hop on a call to see if I can help you!