How much will I need to save in my Emergency Fund?
Well that has been the question since the first time I became debt free back in 2011. Working towards a goal has been my saving grace when it comes to my finances and so I need a goal amount. A ball point figure that will cover all my needs for a three to six months period. Dave Ramsey's baby steps call for 3 to 6 months of expenses but my expenses are really low i.e. 6 months expenses would only be £1,200 which is not enough for an Emergency Fund. But that would be an amount to save towards.
Part 1. of my Emergency Fund would be to save £1,200.
Part 2. of my Emergency Fund is to save a further £6k.
All going well - part 1. should be done by the end of May but part 2. is going to take a lot longer. It should be done by December 2016. This is budgeting £300 a month but I could pay more towards this goal depending on work.
Having an Emergency Fund is so important and I have learnt this the hard way. I got back into debt because I didn't have an Emergency Fund fully funded the last time. This time I will follow all the baby steps without question because I don't know better.
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