Everyone has heard of an Emergency Fund, but what is a Survival Fund?
An Emergency Fund is cash readily available in case of a single emergency, such as a cracked windshield, a medical issue or a broken HVAC in the middle of an Austin summer!
A Survival Fund is money saved to help you “survive” being laid off from work, getting fired, or becoming ill and unable to work. These funds should keep you afloat for 3 months while you get your life back in order.
Expenses are either optional or not optional. If you lost your job, and therefore income, you would end or freeze nondiscretionary expenses like a gym membership, new clothes or expensive dinners with friends.
Other expenses, however, would need to be paid whether you were employed or not, such as rent, groceries, utilities, credit card payments and Internet service.
How much should you save? Here is a plan: Write down all the nondiscretionary expenses you have per month. Take that total and multiple it by three and that is goal amount. Open an interest earning savings account and contribute each month until your goal is reached. It may take a year or two but be patient, you can do it.
If you want assistance setting up a personal Budget, an Emergency or Survival Fund, figuring out the best way to pay off your credit card bills, contact our Austin Financial Coach at Capital Budget Strategies, LLC. Our basic four-hour session is only $149. We meet with clients one-on-one via Zoom, so you can be in your office or at your kitchen table.
Capital Budget Strategies, LLC, Ausitn’s best Financial Coach, will help you win your retirement!
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