You don’t? Well, without one don’t even think about getting into investing. As a matter of fact, even if you don’t have plans to invest, never be without an emergency fund, period. So what is an emergency fund? It is cash, which will cover your 3-6 months expenses. If for example, you lose your job tomorrow you will have enough cash on hand to pay off all your expenses during the next 3-6 months, which should be sufficient time for you to get a new job.

The best of all even this emergency fund, put into an extra safe money fund, can grow 5 percent per year on average. So this money won’t be sitting still. It will be working for you, yet it will be readily available should something unexpected happen. So if you do not have an emergency fund, do not wait, start saving now. Each month put aside a little bit of money and in a couple of years you should have your emergency fund ready. Having an emergency fund that will cover even one month of expenses is better than none. But ideally aim for at least 3-6.

So what are you waiting for? Go ahead and start making plans on how to setup your emergency fund. That is, if you don’t have one already. And if you are beginner you probably don’t, just like I didn’t have one when I first started learning about the world of finances. Now I do, and it does give me peace of mind.