Emergency Fund

Building an emergency fund is one of the first steps to achieving financial freedom.  It’s a super simple concept that really only consists of savings a certain amount of money in relation to your expenses.  It’s as simple as that.  The general advice is to have an emergency fund in the bank that is around 3-6 months of expenses.  This is most often enough to cover for a lot of unexpected costs that may arise in your life.  Examples could be a car repair, home repair, medical bill, etc.  An emergency fund can truly provide a sense of financial stability and is a key element to determine ones financial intelligence.  Depending on your personal lifestyle or desires, you may opt to increase or decrease the amount of money in your emergency fund.  It is often recommended to keep your emergency fund in a separate account than your other money to help encourage you to not dip into it for non emergency reasons.  It’s certainly not mandatory to keep your emergency fund in a separate account, but it’s definitely a great idea for people who maybe don’t trust themselves with that money.  In my professional opinion, building an emergency fund should be the first step for anyone that wants to achieve personal financial success.  Forming an adequate emergency fund can save you from an immense amount of trouble and stress.