Here’s How to Set Up Your Emergency Fund

We’ve all had big expenses we didn’t see coming. That’s life. But that future (inevitable) car repair doesn’t have to stress you out.

Next time, use your emergency fund! This “rainy day” money provides a cushion between you and all the stuff that hits the fan.

Here are four common questions about emergency funds and how to set yours up:

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The Emergency Fund: Why You Need It, and How to Get It

Emergency—that word gets your attention, doesn’t it?

Emergencies are like rush-hour traffic: not fun to think about, but they’re still a part of life. The problem is not enough people prepare for them. A Bankrate survey conducted in June found only 22% of people have six months’ worth of expenses saved in an emergency fund, and 29% have no rainy-day fund at all. Think that’s eye-popping? Then consider that 53% of responders who earn less than $30,000 a year haven’t saved a dime for emergencies!

If you don’t have an emergency fund, you’re obviously not alone. But think about how awesome it will be when you can join those who do have emergency savings. Those people don’t hit the financial panic button when they face a busted water heater, car trouble or even a hospital visit. They can cover their bills because they’ve saved for a rainy day. Are you ready to join that group of people?

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Emergency Fund 101: A Quick Guide to Baby Step 3

Wouldn't it feel great to have a buffer between you and the curveballs life throws at you—a buffer that helps you sleep like a baby because it turns a crisis into an inconvenience?

Well, there’s good news! That buffer is part of the EveryDollar plan. Say hello to the fully funded emergency fund, also known as Baby Step 3.

The emergency fund is a reserve of three to six months' of expenses that you set aside to cover any sudden costs such as a fender bender, hospital visit or leaky roof.

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