Three Things Steps: Saving for a Rainy Day

Do you pay your bills as they come, and do not charge more than you can afford? Excellent. Are you regularly raises funds for retirement, perhaps through a plan (k) 401 at work? Good. Have you put a considerable amount of money aside as an emergency fund? No? Well, this is a problem - but not insurmountable. Take a deep breath and read on. Here are three steps you can take right now to reverse this situation.
1. Understand the concept.
First, let's define our terms. Unless you are independently wealthy, it's smart to have a dedicated emergency fund ready disasters. You could lose your job, for example, or the experience of an expensive health crisis. It's easy not to think about this type of event, assuming it will not be for you, but it happens to some people and can cause financial havoc. (Even a large car repair can take your blow if you do not have the finances ready.)
How much money are we talking? Well, a common recommendation is to have the equivalent of three to six months of living expenses away hit. Note that there is no one size fits all short, and even the rule of three to six months is difficult. If it's easy for you to find a new job when you need it, then it might need to save as much - especially if you are in a two-income household. (But imagine a scenario in which one of you is punished, and the other must become a guardian -. Both revenue could suffer) If it takes a long time to find work, though, or you are just a very risk averse , consider saving even more, as the equivalent of a year of necessary expenses - including food, housing, utilities, insurance and all other costs are not negotiable in life.
Two. Start saving and investing wisely.
Once you start to accumulate funds to your account in case of emergency, be sure to keep that money in the right place. The stock market, for example, is not suitable, you can drop sharply just before having to withdraw the money, leaving you with less assets.Meanwhile, a CD of 3 or 5 years is not ideal either, because it blocks your money and charge an early withdrawal penalty. The bank accounts or money market funds are generally good choices, but offer insignificant interest rates these days.
One possibility is to keep a part of your emergency fund in low growth areas safe while a third party investment elsewhere. The safest part you can save time during DC maturation, or in the worst cases, you will have to pay a fine, but will be able to make a considerable sum. (Some discs have no break penalty early). You can also opt for some dividend stocks heavy for a relatively stable part of their funds.
Three. Be creative.
Finally, think of ways to help fund your emergency savings "box". Of course, you can take a second job to generate more money quickly. But you can also make a garage sale, set your budget by reducing discretionary spending, or cancel your membership at the gym and take walking or running in place. Spend some time shopping around for the best deal on your home insurance and car insurance, and you may be surprised saving hundreds of dollars. You can park your refund immediately in your emergency fund, too.
If you have an emergency fund, but you are in good health and a job, you are still in an excellent position to create a background and be ready at any twists and turns life throws at you.