One of the things I’m still battling with on my financial journey is building an emergency savings fund with 6 months’ salary in it.
My focus was to pay off debt and start building an investment portfolio, which I’ve done really well.
But the emergency fund?
Not going so well at all.
And I don’t consider my investments in endowments and unit trusts, emergency funds. To me they are long term investments, for other things.
Why have an emergency savings fund?
Because life is uncertain – you could lose your job, be forced to take a leave of absence, the car breaks down etc.
And when these uncertainties arise, you don’t want to start taking money out of your investment portfolio or retirement fund because that defeats the purpose of investing.
The more money we invest and the longer we invest our money, the higher our return on investment.
Also if you have an emergency savings account, you’re unlikely to rely on credit cards or debt to pay off any unexpected bills.
So you stay debt free. Yay!
How to save money
Click on the video below and check out the latest Wealthy Money TV interview on how to save money:
Let me know your thoughts
Do you have an emergency savings fund?
Have you started an investment portfolio?