Top 4 Characteristics of People with an Emergency Fund

This likely isn’t the first time you’ve heard it, but you need an emergency fund of 3-6 months of expenses. It’s pretty simple really: Cash, set aside in a separate account (money market or savings) that you never touch except for emergencies. This simple concept will have a huge impact on your financial future though! Here are the top characteristics of people who faithfully maintain an emergency fund:

Peace!

Having money set aside for a rainy day turns a significant set back into a minor inconvenience. Imagine the sinking feeling deep in your gut when your car won’t start, or your hot water is cold! You’ll rest easier at night knowing you can weather the storms that will inevitably come your way.

Prosparity!

One of the most common pieces of advice given by millionaires when asked about how to become financially successful is to maintain an emergency fund. Although many experts recommend keeping a credit card around for unforeseen expenses, spending money you don’t have during a crisis can make a bad situation worse!

Discipline!

My wife and I have been saving for furniture for our home even though our emergency fund could easily redo our entire upstairs. Diligently putting money away month after month keeps us focused on spending it wisely when the time comes.

Planners!

The experience of building up a fully funded emergency fund and the time it takes to do so will turn you into a planner if you weren’t already. You’ll see that vacation coming 6 months away and begin to prepare. You’ll plan and prepare to keep from having to use your emergency fund that you worked so hard to build. By the way, this is also one of the top indicators in your character towards you becoming wealthy according Dr. Thomas Stanley’s research in The Millionaire Mind.

Building a fully funded emergency fund is Step-3 in the steps to financial freedom.

What About You?

• Do you or don’t you maintain an emergency fund?
• Where do you save that money?
• How quickly could you access it if an emergency came along?

Related posts:

1. Emergency Fund in Action!
2. Where to Keep Your Emergency Fund
3. In God We Trust, Right?
4. When Clouds Gather – Preparing for Emergencies