Why do I need an emergency fund?
The inevitable always happens, life happens. Just things that come out of left field. Just stuff that will require a big chunk of money that was unforeseen.
The financial buffer an emergency fund provides can keep you afloat in a time of need without having to rely on credit cards or take out high-interest loans.
How much should I save?
Calculate your monthly expenses and save three to six months of that amount. For example, if your monthly expenses are $4,000 then save at least $12,000 to cover three months of expenses. If you can save $24,000 to cover six months of living expenses, the better. Obviously, your amount depends on your financial circumstances but the more you can put away the better.
Where do I put my emergency fund?
A high yield saving account is one good option. Why? It earns some interest over time and access to your funds is quick and easy. Whenever an emergency happens, you need quick access to your funds without delays. The emergency savings should be preferably in a separate bank account than your main checking account.
How do I build an emergency fund?
Speaking of tax savings
Almost everyone uses their car for some trips that may be tax deductible. Especially if you are self-employed. A sales associate driving to meet clients, customers, work related projects and so on. But how should you keep track of all the miles? Technology has a simple solution. Get a mileage logging accounts that keeps track of all your miles in the background as you drive.
MileIQ is an app that lets you track every drive easily.
Your miles are automatically logged and recorded creating a complete record of all your tax deductible and reimbursable mileage. Classification allows you to categorize which drives are business and which are personal.