Friday, June 13, 2008

More About a Monthly Emergency Fund

My monthly emergency fund is something I have done for quite a while but I just realized yesterday that I had never mentioned it. It really is a misnomer, but let me elaborate.

I take a certain amount of my paycheck each month that is not allocated to any other purpose and save it. It goes into savings with any other overage, but it can be taken out for miscellaneous expenses. This helps me because I don't make it a regular part of the budget. I feel that if I did, this money would get spent EVERY month. So, it goes into savings ,but portions of it can come out if needed. If they are not needed they stay put in savings and become part of it. NO ROLLOVER. Once the month is over that money is property of savings. (Or when I get our hospital bills in and paid for, it will start going toward debt.)

Budgets have always scared me because there is always seems to be something that pops up out of the blue. This is my way of making sure my savings is safe, AND I will be okay if I go a little over budget for one reason or another.

This month the money is really going to help with the way gas prices have been rising. If I didn't have this small stash I would run the risk of having to dip into savings this month.

So, this is just an idea you might want to try out. The amount I have on hand varies from month to month. Sometimes I have none left to put in the monthly emergency fund, some months I have close to $300 for it. It depends on a lot of things, but I try to have some to have a cushion.

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