Creating an emergency fund, or a rainy day fund can help you feel less stressed when an unknown or the unexpected hits.
A good goal is to keep 3 months’ worth of expenses in a separate savings account. So first you will have to determine what expenses are for one month. Monthly’ expenses are those such as rent, insurance, groceries and loan payments (school and car), utilities, and travel expenses like gas for your car or fare for public transit.
Use this chart to help you calculate your monthly expenses.
|EXPENSE ITEM||MONTLHY COST OF EXPENSES|
|Gas Bill (for the home)|
|Gas (for car)/ fare for public transit|
Here are a few situations in which a rainy day fund might need to be used:
- Unanticipated medical expense
- Losing your job/between jobs
- Major home repair
- Major car repair