Wednesday, February 10, 2010

Emergency fund

An emergency fund is three to six months of living expenses in a separate never-to-be-used account. This isn't a credit card nor is this money to be mixed in with other accounts.

Having an emergency fund is critical to a financial plan. Don't be lulled into thinking a credit card with a high limit can suffice as this fund.

If a true emergency occurs you don't want to be taking on more debt do you?
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