![]() These are crucial because in the event of an emergency you might otherwise find yourself using your credit card or borrowing against your house or retirement savings. Nobody wants to be one paycheck away from being unable to pay their rent or one car breakdown away from being unable to get to work. Having a substantial emergency fund provides you with peace of mind. You cannot use your emergency fund to go on a vacation, go on a shopping spree, or upgrade your perfectly good cell phone or laptop. You should only use your emergency fund for true emergencies, such as keeping yourself afloat between jobs, car repairs, medical expenses, or home repairs. ![]() That gets you used to not having the money.įor those who don’t have retirement options at their place of work make sure you create one somewhere else and still try to set up automatic payments and transfers so you don’t have to do it manually. It gets taken out of your paycheck before you even see it. That means you don’t have to worry about depositing the money. Make sure you’re signing up for automatic contributions if your company offers them. ![]() The rest should go to other types of savings accounts so you have some money left over if you need it. Remember that your goal is to get up to 20% of total savings, but that doesn’t mean all of that needs to be in the form of retirement. You should save around 15% of your income, but whatever you can put away is going to be better than nothing, so put at least as much as your employer will match (and max out that match). Next up, you need to make sure that you’re putting some money away for your own retirement. You’re going to be spending a whole lot more in interest than you will earn on your savings so make sure that you put this ahead of anything else you’re doing. All products are presented without warranty. Learn more about how we review products and read our advertiser disclosure for how we make money. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval. This website does not include all card companies or all card offers available in the marketplace. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The product offers that appear on this site are from companies from which this website receives compensation. This website is an independent, advertising-supported comparison service.
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