So a lot of financial experts tell us to have an emergency fund set up in case of…an emergency. They say the standard savings for this fund should be 3-6 months of your annual salary or your expenses. Well, we didn’t save the salary but we did save up about 2 months worth of expenses and I am SO very glad that we did.
Having money saved for such an occasion is a good thing. We have a few vehicles at our house but I only drive one of those and it just so happened that my daily driving car took a turn for the worst. Being a stay at home mom now, I didn’t have my paycheck to pay for the new tires, tire rod ends, u-joints and bearings that was needed for my front end. The price tag was heavy–around $1500–so I am very thankful for that emergency fund we were able to dip into to pay for the repair so that we didn’t have to put it on the credit card. Now the fun is paying that back so we have the money saved again.
If you can start with the extra money left over from a paycheck and set it aside then build on that, it will grow. That is how we built our emergency fund. I guess you could say we lived paycheck to paycheck. When we got paid we paid our bills, food gas, etc. When we got paid again, whatever was left over from the last check (if any) we transfered to a savings account. Small way to save but every little bit helps.