Build emergency fund from "summary" of The Truth about Money by Ric Edelman
Having a solid emergency fund can help you protect your finances in times of uncertainty. Creating this fund is an important part of financial planning, and it can help provide security and stability. Taking the time to build up an emergency fund can give you peace of mind and better financial security.- Building an emergency fund is essential to safeguard against unexpected financial expenses. It's a good idea to save at least three to six months' worth of income in case of an unforeseen event. This can prevent you from accruing debt or falling into poverty.
- Automate your investments so that you're not tempted to spend that money on something else. Each paycheck, transfer what you can afford into your emergency fund until it has reached the target amount.
- Start small and increase the amount gradually as your budget expands. Even if you can only invest a few dollars each month, it can add up over time and help you plan ahead for unforeseen events.
- Talk to a financial advisor or do research online to gain insight into potential investments. Some options are high yield savings accounts, stocks, bonds, certificates of deposit, or even real estate. Make sure to diversify your portfolio to maximize returns.
