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bank or credit union across town, and don’t carry an ATM/debit card tied to the account. You’ll still have access to the cash when you need it, but you will be forced to think twice about making a withdrawal.
Remember, when all is said and done, an emergency fund is the most important financial step after taking care of basic living expenses. It can be your financial cushion in case something goes wrong, and you need access to money quickly. Consider these tips in establishing your own emergency cash reserve:
1 . Decide how big a cushion you need . Establish a target that makes sense for your circumstances, and once you reach that target, keep adding more.
2 . Keep your hands off it . Many people don’t have any emergency money in the bank because they encounter what they think is an emergency every month. A genuine emergency is something that threatens your survival, not just your desire to be comfortable.
3 . Put it in the right place . Make sure your emergency money is in an account that earns interest.
4 . Also keep some emergency cash at home . It’s also wise to keep $300 to $400 in cash at home in case of a natural disaster or other emergency where you may not be able to access funds at your bank for several days or more. Also, keep the bills in smaller denominations, such at $5, $10, and $20 bills.
Saving For Emergencies, Periodic Payments, and Financial Goals
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