If you recently found a better-paying job and are finally ready to get your finances in order, visiting an investment planner is a great place to start. Investment planners not only help people choose the right investments, but they also help people develop budgets, savings plans, and emergency funds. Creating an emergency fund is one of the first things you should do when taking the step to gain control over your finances, and here are several things you should understand about this.
What Is An Emergency Fund?
An emergency fund is an account that should contain at least three to six months worth of your monthly expenses. It should be in an account that is easy to access, and the money in it is designed only to cover emergency expenditures. The purpose of having an emergency fund is to help you get by in times of extreme need. It is also there to help you pay for large expenses you were not planning on. By having this, you can protect your normal monthly budget.
How Can You Create One?
The best way to create an emergency fund is to make the following decisions:
- What bank you will use to hold the money
- The amount of money you need in the account
- The steps you must take to build up the account
You do not have to wait until you have the full amount of money to open this type of account. Instead, begin small. If you only have $100 to start with, at least you will have started, and you will be $100 closer to your goal.
An investment planner could help you come up with ways to build your emergency fund, and this may require helping you create a budget. A budget will help you spend your money wisely and save the right amount of money. Developing and sticking with a budget often requires cutting back on spending. While this may not sound pleasant to you, you will be pleased after a few months of following it, because you will be able to see the fruit of your labor.
What Should You Do After You Establish Your Fund?
Once your fund has the correct amount of money in it, your investment planner will help you move on to the next phase of investment planning. This will involve coming up with the best ways for you to save money for retirement.
Now is a great time to take control of your finances, and you can learn more about this by scheduling an appointment with an investment planner (such as one from Family Financial Partners) in your area.