Monday, August 3, 2009
Your first order of business in saving money is to save some emergency funds. This is just so important. Many people will save up a bunch of money and then invest it right away. That is a problem, because they do not have any emergency savings. Emergency money is so important because it will protect one and one's investments from unforseen events. If you do not have any emergency funds, you will find yourself in a heap of trouble when something comes around. You will probably have to liquidate your investments. You'll need to save up a decent amount. 3-6 months living expenses is recommended by most gurus, but we recommend having a year of savings. The reason is somewhat obvious. You don't really have 3-6 months savings. What if your car breaks and insurance doesn't cover it? There are many things that can happen that require you to spend a great deal of money. So, a year of savings might only last you 6-10 months. A year is advised. Better get started.