| You're probably familiar with Murphy's
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| | long-term disability insurance like
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| Law: "Whatever can go wrong, will go
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| | AFLAC. This can help pay some bills while
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| wrong." It rears its ugly head when we
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| | you're out of work.
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| least expect it. That's probably why it's
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| | Where should I put it?
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| called a law, not a theory. When it comes
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| | Your emergency fund should be stashed
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| to personal finances, old Murphy really
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| | somewhere safe and easily accessible. No,
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| seems to know when to pile it on.
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| | not under your mattress. We're talking an
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| Unexpected expenses and changes in your
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| | account with liquidity, meaning you can
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| financial outlook are not a matter of
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| | turn that savings into cold, hard cash
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| "if", but "when". But all is not lost
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| | quickly. Checking accounts, savings
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| however, with a little prior planning,
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| | accounts or money market accounts are
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| you can be prepared for when Murphy comes
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| | just a few options to look into, though
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| knocking.
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| | each offer different advantages and
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| It's a great idea to always have a backup
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| | disadvantages.
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| plan, especially when it comes to
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| | Checking accounts offer little to no
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| finances. When times of crisis hit,
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| | interest gain on your savings, and many
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| you'll need an emergency fund to fall
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| | of them come with monthly fees. Savings
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| back on. Some cash set aside to deal with
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| | accounts are a good option as they can
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| life's little (or big) detours.
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| | provide a small return on your savings
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| How Much?
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| | and probably won't charge a fee, but you
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| That depends, really. What kind of
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| | may incur a penalty if you withdraw a
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| lifestyle do you lead and how much will
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| | large amount. A money market account is a
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| it costs to maintain that lifestyle if
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| | viable option as it will probably feature
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| you're out of work? Most experts
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| | a higher interest yield than both a
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| recommend you save a minimum of three
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| | savings and checking account, but your
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| months worth of basic expenses. Figure
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| | money might be a little more difficult to
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| out your monthly budget (you do have a
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| | get to.
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| budget, don't you?), subtract expenses
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| | You can also go with a Certificate of
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| you can live without, then multiply it by
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| | Deposit (CD). This will give you the
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| the amount of time you think you'll need
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| | highest return for your money, though
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| the fund to rely on.
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| | most CDs require a large amount to open
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| Keep in mind, three months contingency
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| | and you have access to the money only
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| money should be an absolute minimum. If
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| | when it matures; cashing out before that
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| you're single and have no dependents, the
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| | date will result in stiff fines. That's
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| amount is going to be significantly less
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| | not going to help when you're already
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| than if you're married and have three
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| | hard up for money.
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| kids. The more people you're financially
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| | Whatever method of savings you choose,
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| responsible for, the more money you
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| | make sure your emergency fund is
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| should plan on socking away in this fund.
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| | somewhere where you won't be tempted to
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| If you have dependents, look to save at
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| | dip into it. Mixing your must-have
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| least six month's worth of expenses.
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| | emergency cash with your "saving for a
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| To soften the blow should hard times
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| | speedboat" account is probably not the
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| arrive, look into short-term and
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| | best idea.
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