How (And Why) You Should Start An Emergency Fund

Do you have the money to cover a $400 emergency expense? Most Americans do not.

Some 40% of US citizens cannot easily handle an unexpected bill of $400 or more. This means car trouble, medical expenses, a broken water heater, or other mishap will cause them serious financial hardship.

Don’t make this mistake.

Today’s article explains why you should start an emergency fund, how to store your cash reserve, and what you should use this money for. Additionally, this information scales. That means it’ll help you no matter what amount you have stockpiled already.

Let’s dive in.

Don’t Let Yourself Get Caught Off-Guard

In 2019, a trip to the hospital cost me $2,000 out of pocket. Rather than having to worry about where I’d get the money (needing to take out an expensive loan), I dipped into my emergency fund and paid the whole thing then and there.

The craziest part?

It had no emotional impact and caused zero stress.

And that’s what your emergency fund is supposed to do. This isn’t money for investing or penny stocks, it’s a lump sum that sits idly and buys you peace of mind.