December 14,2006
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Save For a Rainy Day... Today!
The thing about emergencies is, most people don't expect them to happen. That's something like the nature of the beast. If we could chart exactly when we were going to lose our job or have a natural disaster demolish all our earthly possessions, we might not have a need for an emergency fund.
With gas prices high and home values low, the odds are that most of us haven't been saving for that proverbial rainy day. Experts recommend that you have at least three to six months' living expenses stashed in your piggy bank – do you? You may think of emergencies as grand-scale disasters, but, when you are living paycheck to paycheck, a flat tire can be catastrophic. If you end up having to charge the cost of a repair, or give up groceries for that week, you are simply living too close to the edge.
A better way to look at savings is to put yourself in a position not to consider it at all. Have a small percentage (5-10%) of your paycheck direct deposited to an earmarked savings account, and you'll never miss it. By getting used to living off a certain amount each week / biweekly, we set ourselves up to spend it all. By taking your savings off the top, you set yourself up for success!