FMOOD 0002: The Emergency Fund

Today I'm talking about the emergency fund, or more specifically, the starter emergency fund. This is the amount that you should have set aside to serve as a cushion for any emergencies that come up that will allow you to pay cash rather than going into further debt when there is an emergency situation that arises.   Hot water tanks will need to be replaced (ours just needed replaced not too long ago), roofs need repaired, and refrigerators break. Putting these expenses on a credit card is a surefire way to set yourself up to psychologically continue to rely on credit. The solution to this problem is to have some money stashed away in an accessible account with a minimum balance of $500.00 and a maximum balance of $2,000.00 that is strictly set aside for emergencies.   The key here is to only use this money that has been set aside for emergencies. No borrowing out of the emergency fund for non-emergencies! This episode goes into more detail about this in particular as well as the pitfalls that we all need to look out for.   If you liked this show so far, please take a minute to subscribe to the show, rate it, and leave a review. Your positive and kind words are always appreciated.