dollar-1362243_640All financial experts agree that one of the most important ways of saving is to develop an emergency savings account. The emergency savings account should be your first order of business before any other investment or current savings account. All efforts should be promptly shifted over there. That includes going over retirement, and other large funded expenses. The reasons for this are very simple and it is a good rule of thumb to know how much you’re going to need to save.

Starting the Fund

The logic behind starting a savings fund is simply because if you lose your job, come down with a terrible sickness or find yourself in a financial mess where you have no money coming in, then it’s time to tap into those funds. They key point behind all of this is to have those funds so you can avoid losing a home, falling into bankruptcy or accruing high interest debt.

Now is the time to start and begin to plan how much money you’ll need to start to have in the first place. Experts believe that it is best to cover somewhere from six to nine months worth of expenses, while others think the low end of three to six months will do fine just as well.

Your exact amount should be determined by a couple of factors in terms of job, current financial standing, income and expenses at the time. If you’re relatively well off and debt free at the time, you can afford the lower end. Inversely if you’re not, it’d be best to rather be safe than sorry.

Quick Cash Injection

Unfortunately not all times are well suited to start an emergency fund. It is easy to say that it is a necessity, but often people are pushed to the brink and never think of these kinds of things. They’re too busy spending on everything else. In the event that you would need some cold liquid cash, there are great low interest options out there.

One way of getting this money would be through, a quick and easy way to get a couple hundred to thousands of dollars delivered in hours or within the next day. You’re looking for an emergency fund that is, and emergencies require quick response time.

While you’re at it you should be conscious of the fact that you should calculate your amount of savings with a quick set of guidelines.

Savings Guidelines

The first thing you’ll want to do is target your savings goals through a few different methods. One of those is to list all of your fixed costs that you know must be paid on a monthly basis. The things that need to be included on here is monthly payments that include housing expenses, insurance, car payment, maintenance, (gas, electric, water) bills, food to name a few.

There are so many things in the modern world that are now a necessity to not only live, but also that we use for our jobs, communication and overall lifestyle. By totaling your monthly expenses it will give you a general idea of how much you’ll need in the emergency fund.  If you’re unemployed some of these prices you first spent on. Might go down. But having some extra money in the fund isn’t going to do you harm.

Win-Win Situation

Having an emergency fund is always a beneficial aspect of any smart financial planning system. In the event that you don’t run into any financial emergencies, you have the ability to invest some of that money, make it grow even larger and have a larger safety buffer.

It’s okay to save for things that aren’t necessities as just working for the basics isn’t any way to go through life and saving money for that matter as well.  Again, you may run into a couple unexpected costs along the way if you’re unemployed and certain areas of life aren’t covered anymore, namely insurance.

A buffer created allots for these unexpected costs that might send you into the very essence of what you were trying to avoid, be it bankruptcy or losing the house. Once you’ve managed to completely fund that emergency account, you’ll be able to responsibly hold onto it.

Think of it as a kind of insurance that isn’t really there too. After all, you hope that there never is an emergency, but if there is your fund has got you all covered.

Sebastian Barton is a Dad who got his finances in order and debt paid off within 5 years after a shock redundancy made him take action and change his spending habits. He now writes articles on personal finance topics for a variety of websites.