Evaluating necessity  - Deepstash

deepstash

Beta

deepstash

Beta

3 Questions to Ask Before You Use Your Emergency Fund

Evaluating necessity 

One very important reason, if not the most important of them all, when choosing to use your emergency fund, is the situation of necessity

Of course, if you have to, you should do it. However, you might want to pay attention to what necessity really means: if you can as well do without, then you probably should not spend your savings on that.

75 SAVES


This is a professional note extracted from an online article.

Read more efficiently

Save what inspires you

Remember anything

IDEA EXTRACTED FROM:

3 Questions to Ask Before You Use Your Emergency Fund

3 Questions to Ask Before You Use Your Emergency Fund

https://www.daveramsey.com/blog/3-questions-emergency-fund

daveramsey.com

3

Key Ideas

Managing your emergency fund

Having an emergency fund can prove life-saving when you are in desperate need of money. However, before starting to use the money, make sure the situation really requires the measure. 

For instance, try spending the money on situations that occur totally unexpectedly rather than on events that happen on a regular basis.

Patiently manage your emergency fund

Whenever you have the impression that you should use your emergency fund, ask yourself if the situation really is urgent. If the answer is Yes, there is no time to waste. 

However, take time and be patient in managing different situations as, if there is no need to spend the money, than better not do it. Remember, it took time to build up that fund, no matter how big or small it eventually is.

EXPLORE MORE AROUND THESE TOPICS:

SIMILAR ARTICLES & IDEAS:

A Monthly Budget For Your Money

No matter how little or how much money you earn, creating a monthly budget is one of the most important aspects of managing your finances. What gets measured gets managed.

...

The Envelope System

The Envelope system is a way to track your variable expenses like food, entertainment, and drinks.

This method, preferably used weekly, allocates a certain amount in each category in labeled envelopes (food, drinks, movies, etc.). Once the envelope is empty, you are done spending in that category.

How to Create a Good Budget

The principles that make a good budget, something you can stick to:

  • Being Realistic: Being too strict is a recipe for failure.
  • Making Adjustments: A budget is not set in stone, but a fluid thing.
  • A Team Sport: If you live with a partner or spouse, you have to agree mutually on how to budget the financials.
  • Expect the Unexpected: Keep an emergency fund, ideally 3-6 months of necessary expenses.
  • Budgeting the Expected: Certain upcoming expenses need to be budgeted in advance, like property tax, holiday shopping, etc.

2 more ideas

Budgeting = creating a plan to spend your money

Budgeting is simply balancing your expenses with your income.

It's a plan for the coordination of resources and expenditures. When you budget your money, there’s a desir...

How to create a budget
  1. Gather Some Financial Information: gather a detailed list of your income and expenses.
  2. Select a Budgeting Method: figure out how you’ll budget your money to meet your most pressing financial goals.
  3. Create Your Budget: tally up all your expenses and income to see where you stand and allocate expenses.
  4. Execute Your Plan: you can use a notebook, pen and paper, a spreadsheet or an online software.
  5. Reward Yourself: you can work a small percentage into your budget to treat yourself each month.
The 70:20:10 budgeting method

This method suggests that you allocate 70 percent of your income to expenses, 20 percent to savings, and the remaining 10 percent to debt.

70:20:10 may work for someone with a healthy emergency fund and minimal debt.

4 more ideas

The Golden Rules of Personal Finance
  • Spend less money than you earn
  • Always plan for the future: you should always look forward beyond the current month
  • Make your mon...