Building an Emergency Fund - Cash Emergency Fund

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Start Building an Emergency Fund

What is an Emergency Fund

An emergency fund is a saving plan whereas you put cash money away for the purpose of having enough money to cover your expenses in case of some unforeseen incidence such as losing your job or having an heath issue.

Everybody know that having an emergency fund should

be high on your priority list when it comes to financial

stability. Even when I was a child I use to hear people

talk about saving for an emergency.

What's the Purpose of an Emergency Cash

Fund?

If some unexpected incidence was to occur in your life

that would halt your normal income, an this cash

fund will be able to sustain you for a while.

Other Terms For Emergency Fund

If you hear the terms below you will know that it is the same as an emergency fund.

1) Emergency Saving Fund

This term states that you need to save money for an emergency.

2) Saving For a Rainy Day

I've been hearing people make this statement for as long as I can remember. You too probably heard it many times over the course of your life. "You need to put back some money for a Rainy Day" they would say. Although I was young the first time I heard it, I understood that something could possible happen which could cost a lot of money and if you didn't put enough money away you would be in a whole lot of financial trouble.

3) Cash Emergency Fund or Emergency Cash Fund

You might hear either one of the above terms used when talking about emergency fund. The reason why it is sometimes called a cash emergency fund is because you'll only be putting away cash money to cover the emergency that might occur. When an emergency arrives you won't necessarily have time to sell your assets to get the cash you need. Therefore this savings fund should be all cash.

4) Emergency Savings

This means that you have a savings plan set aside for an emergency.

5) Emergency Money

This is a term used when someone has enough money set aside for an emergency.

How to Start Building an Emergency Fund?

1) Create a emergency fund building plan

2) Start saving money by spending less money and use the extra for the sake of saving for a rainy day. Read to find different ways to save money.

3) Put the money you saved in a safe but yet an easily accessible place such as a saving account in a bank or credit union.

How much money to save for an emergency fund?

Deciding on how much money to have in case of an emergency depends on the amount of your monthly expenses. If you were to become unemployed how long do you think it would take before you get hired again? For example if you think it will take 6 months to get a job then you'll need to multiply the total amount of your monthly expense (how much it takes for you to live) X 6. The total will be the amount of cash money you need to put in your emergency fund.