Single Parent families in trouble can tell you how quickly a “rainy day” fund disappears in a real emergency. From buying extra food, paying unexpected medical bills, to miscellaneous other occurrences. It’s easy to blow through several hundred dollars during these times –– let alone the money you might spend on just daily normal expenses.
Emergencies can happen at any time. So even if you’re not a single parent family in an emergency now, let this be a reminder to firm up your emergency savings fund.
A word of caution: don’t fall into the trap of “all or nothing” thinking. You don’t have to wait until you have $100 or more to set aside. Save whatever you can –– $10 or $20 here and there starts to add up quickly.
A fully funded emergency fund – for emergencies only – is 3–6 months of your personal expenses set aside in a savings account dedicated solely for emergencies.