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Establishing an Emergency Fund

Build a financial safety net by establishing an emergency fund.

Establishing An Emergency Fund

Since life is unpredictable, it’s important to build a financial safety net.

60 percent say their financial planning could use improvement

Include in your monthly budget a contribution toward an emergency fund, because no matter how carefully you may plan your finances, there will always be unexpected expenses like car repairs, home repairs or veterinarian bills.

The general rule of thumb is that you should keep an equivalent of six months of living expenses in an account set aside for emergencies that you can access easily. By having a bit of a cushion when you need it, you can avoid raiding other accounts (such as your vacation savings) and spare yourself the added expense of financing an emergency using a high-interest credit card or dipping into your retirement nest egg.

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