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Emergency Fund

What Destiny’s Child says (in their song, Bills, Bills, Bills)

“Can you pay my bills?
Can you pay my telephone bills?
Do you pay my automo‘ bills?”

 

What we can learn from pre-Jay Bey (& Co.):

Emergency Funds are what the two ex-members of DC had to rely on after being fired from the group, and your EF is for just that—bills, bills, bills in the event you experience a loss of income.

 

How you can use an emergency fund in your own life:

  1. While it may seem hard at first, having an emergency fund will keep you from putting emergencies on credit cards and being in a cycle of credit card debt for the rest of your life!
  2. Emergency funds also ensure your bills are paid on time which keeps your credit score in tact.

 

The Financial Lessons:

  1. Setting aside 3, 6, or 9 months of expenses (the amount depends on who you are and how many financial responsibilities you have such as a house, kids or other dependents) creates a nice cushion for the “just in case” in life.
  2. For those paying off credit card debt or student loans, try saving up $1000 for a small emergency fund while funneling extra cash to debt payments.
  3. When figuring out how to use an emergency fund, it is important to learn what is and isn’t an emergency. Breaking your leg is an emergency. Taco Tuesday is not.

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