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