Tip #7: Prepare for Emergencies
“Care shouldn’t start in the emergency room." – James Douglas
An April 2020 Pew Research survey found that 52% of middle-income and 25% of
upper-income (US) households did NOT have an emergency fund to help them cover 3 months of living expenses. Although it’s important to be optimistic about the future, you should also prepare for rainy days.
We might have engineered a cure for COVID-19 in 2020, but there will never be a vaccine against a personal crisis. It’s also impossible to predict the timing of financial or medical emergencies. Therefore, before you drop your first dollar into an investment portfolio, make sure you have put aside 3-6 months of monthly expenses in an emergency fund. This will give you the peace of mind and confidence you need to plan and achieve your financial goals.
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