After the honeymoon and your return from worry-free wedded bliss, it’s time to start thinking of other matters. That doesn’t mean returning to the real world is the end of the fairytale – quite the contrary. Handling specific emergency money matters early on will help to ensure that the fairytale lasts as long as it possibly can.
No one likes to think about the “what ifs” and the “what might happen” aspects of life. It’s uncomfortable. But planning for emergencies is important. Things do happen, so having everything prepared beforehand can make life a lot easier afterwards. After all, even with a great career, something might happen within the company that leaves you jobless. Or that joker on the highway was on his cell phone and you find yourselves looking for a new car.
Since we all know money doesn’t grow on trees, it’s important to stow some away for the unexpected, should it ever occur. So how much should you hide under the mattress (actually, it’s better that you hide it in a bank with good interest rates)?
The best approach is to have at least 3 to 6 months worth of living expenses waiting in the wings. Put the money into a money market account because these typically have higher interest rates than a basic savings account. You could put some of the money into a CD for an even higher interest rate, but it is important to remember that CDs are meant to last for a specific amount of time (anywhere from 3 months to 24 months) and removing money early could result in a penalty. So if something should happen (heaven forbid) during the time your CD is accruing interest, you would actually lose money in the deal.
Knowing that you have money available for emergency use will help give you peace of mind. That way you won’t suddenly find yourselves living paycheck to paycheck or worrying about losing your home, filing for bankruptcy, or any other seriously stressing issues. You’ll feel a lot lighter and with the added interest on your deposited money, you will be gaining a little extra cushioning each time.
If you have questions about the best possible way to save your money, head off to a bank with a good rating, good interest rates, and talk to someone about your goals. They can help you find the best solution to saving money for emergencies. Just remember to read all the fine print with anything you decide to do!
What’s your emergency plan? Hopefully you have one or this post prompted you to put one together!