How much should you have in your rainy day fund? Depending on the financial pundits you are talking to, they will say anything from three months to one year’s worth of income to cover either three months or one year’s worth of expenses.
How do you get to that point?
You move slowly. From each paycheck or each check you get for a job completed, start putting away at least 10% of the money for an emergency fund. I have been harping for this in different posts for weeks and will continue to do so because I believe that here in America we are at least two years from getting out of whatever recession we are in. The people who will be able to profit and thrive the most will be the ones who have money saved up.
What would happen if you were crippled by an illness? If you have people to care for you will need to make sure that the insurance kicks in and until that happens, you may need your emergency fund.
The Southern United States got lucky with the last hurricaine and a lot of people who temporarily moved away will be able to move back home unlike what happened with Hurricaine Katrina. If you have some money in reserve, it can make the difference between survival and hunger.
Kim Greenblatt
The difference between survival and starvation may be that extra $50 a week you are putting into your savings account.
Tags: Business, cash reserves, emergency money, planning, profitable, rainy day fund