The blizzard of 2010 has swept many off of their feet in the Washington DC Metro area. From major accidents, to roofs collapsing, major grocery store chains running out of food, and major power outages occurring throughout the region, many families have been displaced and or without power for several days. Ole Man Winter has brought more snow than the city has seen since 1996. It has been nearly eight years since we have seen this much snow at one time in a matter of days. With the state of our current economy many have maxed out their credit cards, mortgage payments have doubled and even tripled in some cases; and many people feel like they are just trying to make it during these difficult times.
Due to the major power outages in the area people have had to unexpectedly go and stay at a hotel. Some have even been forced to stay at hotels that are NOT in their price range. The list goes on, from property damage - Ships at the marina sinking from the weight of the snow. The same goes for roofs that have caved in due to the weight of the snow. One family was taken to the hospital because they were cooking on a grill in their basement!!! Carbon Monoxide poisoning - just think of those that do not have any extra money to pick up a few groceries; or those who are behind on their utility bill(s); or those that are not getting paid for the days they have missed from work. Although many of us have not had to report to work we are being compensated by our employer . Our next pay check will not be affected by us not having reported to work these few days. Many people feel desperate to do whatever they need to do to feed their families and stay warm during these trying times.
Many people are “A day late and a dollar short”, literally one paycheck away from being homeless. I truly believe no matter how hard times may be or get it’s extremely important to have an emergency fund and to be as prepared as you possibly can.
What’s an Emergency Fund?
An emergency fund is an easily accessible stash of money for use only in case of emergency. It is not to be used to buy a new car. It is not to be used to buy a new Playstation or Nintendo Wii. It is not to be used to remodel a room in your home. It is for use only in case of emergency.
How Big Should Your Emergency Fund Be?
Most experts agree that you should keep between three and six months worth of your living expenses set aside in your emergency fund. Depending on your specific situation and whether or not you have children, carry substantial debt and types of insurance coverage will determine what amount is best for you.
Start Small
If you currently don’t have an emergency fund or find it difficult to save money the key is to start small. You have to realize that accumulating one month’s worth of expenses will take some time, let alone three to six months. If you set your immediate goals to be small and manageable you will have a better chance in reaching them. If you feel it is difficult to begin saving simply start with a small amount. Maybe you begin with $10 a week initially. After a few weeks you won’t even notice that $10 missing so you can bump it up to $15 or $20 after a month or so. You will begin to get used to that money not being there and can slightly increase it again. You have to be committed to not dibble and dabble in your emergency fund for fluke purchases.
Where to Keep Your Emergency Fund ?
You should start with a savings account because it is simple to use and generally does not cost anything. The convenience factor is what is important when getting started. As your account grows you will want to find an account that can earn reasonable interest so that your money is working for you. The next best options to look into are money market accounts or certificate of deposits (CDs).
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