As a financial advisor, I help my clients set financial goals and stay focused on them. One of the first goals I help them make is to set aside an emergency fund of cash in an easily accessible account, like a savings account. Things happen. You don’t know when emergencies will arise, but if you have some cash that you can get to easily you’ll be better able to handle what comes up. Plus, you won’t have to go into any long-term investments that you have in order to cover those unexpected expenses.
At this point, you may wonder how much cash you should set aside in your emergency fund. I usually recommend 3 to 6 months of your monthly expenses. That way, if you have a job loss, accident, or other emergency, you’ve already bought yourself some time to deal with it, which may be hard enough without the added pressure of not having enough money on hand to cover expenses.
If you’d like to talk more about your financial goals, I’d be happy to meet with you. You can also learn more by going to my blog, where you’ll find more videos like this one and other helpful articles.