Learn to save for financial emergencies. Even if you feel robust and invincible, a single emergency or car accident could force you to put large balances on credit cards, causing interest to accrue and more debt to pile up. “That rainy day will happen,”. “It’s not a matter of if, it’s a matter of when.” If your tire goes flat and you can’t pay upfront for the replacement, for instance, you’re stuck with charging it or reducing funds earmarked for necessities. That’s where the emergency fund fits in
Try this: Maintain an emergency fund of at least three to six months’ worth of living expenses, and keep your insurance policies up to date. Work toward that goal by socking away 10% of your take-home pay each month in a liquid savings account. If you receive a raise or bonus, add that money to savings. Since you’re not used to the extra cash flow, you won’t miss it.
