Why You NEED an Emergency Fund!
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- Опубликовано: 28 июл 2024
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It may not be flashy or exciting, but an EMERGENCY FUND is the foundation your financial health is built upon.
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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Andrew Matthews
Executive Producer: Amanda Fox
Produced by: Katie Graham
Edited & Animated by: Sara Roma
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Music by: APM
SOURCES:
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Emergency funds turns a crisis into an inconvenience!
Raising the minimum wage cause Price's to rise . And the money saved doesn't go fare
@@osmosisjones4912 well, you're not wrong but what does this have to do with wages?
@@osmosisjones4912 but wouldn't you also be able to save more?
And also, saving is actually not the best way to grow wealth. If your looking to secure your financial future, you need to do more than save, you need to invest, pay down debt, creative more passive income etc.
If you want another RUclips channel that offers interesting advise on these topics, try minority mindset :)
@@Poorstargazer23 what Examples do have infation being good thing at least theory show computer simulations World of war craft or the game Monopoly?
how come proverty increase's often when the Democrates are power of course Ragan tour down the housing projects . But how come black second poorest race yet the most welfare. The number poorest are native Americans. Except the Tribes who don't get Reproductions.
no fault Divorces cause mass homeslessnes Men was Feminism.
But issue inflation. Many Woodrow Wilson's polices on free market next thing ya know the great depression .
Also Venozela Cuba North Korea.
What Examples do you have inflation being for the country. Even in any simulations.
The only people benofit from inflation are Democratic politians Because everyone is poor new.
Dave Ramsey
Pffff I'll just never have an emergency. Ez.
Pro move.
@@TwoCentsPBS LOL!!
@@TwoCentsPBS pro gamer move
Niels professional 😉 😂
😲
"How do I get an emergency fund"
PUT ASIDE MONEY!
What if there is no money to put aside? that is the real problem!
@@EmmanuelleVieyra If one has no money to put aside, then they are living beyond their means. There is always somewhere to cut back.
Laetitia M I wouldn’t say always, remember that the federal minimum wage is still $7.25 an hour.
@@carlosgmelendez I would say always! Even the poorest among us sometimes purchase things or services they can forego altogether: a trip to a fast food joint, name-brand instead of generic items, a traffic ticket or taxi fare because we're running late, interest/overdraft/late charges of any kind, cigarettes/alcohol/overpriced coffee, etc.
@@EmmanuelleVieyra if you cannot put aside even 5 dollars a month/week, then you need to re-evaluate every part of your economy
I grew up with financially minded parents. they pounded the 10% savings for a rainy day at me. I listened to them , at 72 yrs I don’t live on my credit card. Own my house, savings 2 years worth. I learned that being frugal is a good start.
thank you for the advice
Indeed it is😊
Thank you for your advice. I have a question, is there anything in your life you think you should've spend more money than you did? if so what times?
This aged like fine wine
Seriously... 😂
the ones that spent the most are the ones right now who are saving everything.
Why what happened?
@@pauljimerson8218 covid19
@@pauljimerson8218 this video was from the before times
This year was the first year I took the EF seriously. Already solved two emergencies and my EF still has a good amount in it. What a relief indeed
I used my emergency fund to keep my cat alive. One of my cats (they came with the girlfriend, but I have grown close to them) was sick. He was peeing blood. The girlfriend said 'this might kill him', and I said 'we are going to the vet, now'. He needed surgery. So, the surgery+inital doctor visit = about 2000. I put it on the credit card, but paid the credit card off immediately. Got to get that cash back. And now, Einstein (the cat's name) is still alive, and wanting all of the pets.
Cats I can understand. If someone brought in a dog and it was sick and needed an expensive doc visit, he would've been out the house.
@@class1sportzers337You’re clearly not a dog person.
@@class1sportzers337 OK, psycho
Two years ago, i had no credit (no debts either, but...), and needed two emergency root canals. Insurance didnt cover it. It came out to a grand total just north of $6,000 that I didn't have. I had just finished paying for school and graduated. I decided then and there that I needed to get that my shit together. I borrowed the money from a family member, paid them back, and began an emergency fund. Now I have about 14k in an emergency fund, I've built up my checking account, I have money in the stock market and have a decent credit score of about 745 (I took out a credit card to start building credit pretty much immediately). It took work and lots of hunkering down and saving, but it was worth it. I got so used to it that I've got a few thousand set aside for a new (well, used) car and I'm hoping to have enough to buy a better car in cash come March to avoid paying interest. Definitely feels like I have more breathing room.
Just finished my 3 month emergency fund last week!
Congrats. Now make it to 6
Great, I'm still working on one.
Congratulations! :)
I'll get there in around March next year.
Now invest it in a Roth IRA. It will grow tax free and if you need it back, 0 penalties.
Saving has always been seen as a mandatory expense. The emergency fund is essential for setbacks.
When I was younger I used to covet only stuff like video games but around my late 20s I started coveting peace of mind after seeing some fellow friends go through rough times.
The emergency fund (6 months worth of expenses) was my first major personal financial success.
It helped years later to weather being laid off and a nice supplement to Employment Insurance.
I love how most of the Two Cents videos can be so depressingly scary and motivationally aspirational at the same time!
Hahahaha, it's a fine line to trod! : )
Ravitejrekhi no se trata de tener miedo , solo ser un poco previsor para que en una situación adversa salgamos adelante !!! Un abrazo desde Madrid 💕💕
US Public School System: **refuses to teach financial literacy**
Me: Fine, I’ll do it myself... **binge watches Two Cents**
This is what happens when you live in a society that systematically forces the individual to lose.
That is partly because of this ridiculous court system. Any financial decision comes with risk. The best decision does NOT give you the best return all the time, but rather does the best to ensure that your bottom line is not affected. If school teaches tips of financial literacy and investment, some idiots will certainly sue the school for whatever BS they get themselves into
This isn't only in the US.. it's world.wide..
*Wait, you were not supposed to do that*
@@pierrel6778 *"watch me."*
had only $1000 into emergency funds while i had 12k in funds
my dog got sick and i needed $400 went to my emergency after never using it and now i’m going to focus on building it up higher than just 1k. my goal is 5k🙏
People always tell me that your savings account should be your emergency fund but I always felt that was wrong and that it should be separate glad to know I was right!
It's just an account. You can leave your emergency fund anywhere as long as the money is liquid. I leave mine in my high interest savings account.
I keep it in a separate account so I don’t touch it outside of an emergency even by mistake
It can be the same account if you know your expenses and how to properly manage them. It's about knowing what's going out each month and what you'd need for a rainy day
No, it really should be your savings account. At least for me, I can pull money from it into my chequing account on the same day for emergencies.
If you are saving up for upcoming expected purchases, then you can leave it in your chequing account if you are undisciplined.
And if you are saving up long term, then that money should be in proper investment accounts, not a standard bank savings account.
Idk if you still read comments from old videos but this video inspired me to start an emergency fund. I broke my spine in an accident right before finding out I was pregnant late last year. I've been in and out of work since with various complications but my emergency fund means that I have not had to stress about money at all during this time.
Prayers for your recovery ❤
They always tell me to live below my means. But who says my means are enough to live.
You wouldn't be the first person to get a second job. The job market is great right now...
That might be a sign that getting creative for additional income is your next step. Second jobs are a great boost to help you start saving (I've had 3 and even 4 jobs when I was trying to pay off debt and save)! -- Philip
The added benifit of working 2 jobs is you have less time to spend your money, so you earn more and save more :)
Haha, looking at the comments it's easy to see how normalized a second job is just to make ends meet 😂😭
I mean, you have to do what you have to do, but it doesn't make it any less messed up.
@@Poorstargazer23 If you have a part time job working 25 hours per week it's not "messed up" to get a second job. I think plenty of people are in this situation. Honestly we have it REALLY good in the U.S. compared to half the world. I really think that if people could travel to a few countries they would count their blessings. Running water and electricity are not a universal right. 16% of the world's population have little or no access to electricity.
That "average American" scenario looks so depressing. 🙁 I hope average person can do better than that.
OmerTheGreatOne No kidding. And it makes me wonder about the situation of the “below average” American.
Obviously, if the average person could do better than that, they'd not be average at all.
The problem is the average American thinks having a $500/mo car payment, eating out four times a week, digging out of a $30k-100k hole after college, $30k weddings and a lifestyle funded on credit cards are just part of the deal.
It's largely a result of bad financial discipline. People would have have a nicer car or the newest iPhone than an emergency fund.
@@scarpfish Don't forget spending 200000 on each hospital visit
The only time I've had to use an emergency fund was when my grandmother passed away. I pulled the 400 bucks out and flew home the next morning. Emergency funds are the best
so i put my big expenses(problems) on a credit card.. but IMMEDIATELY use my emergency funds to pay it off.. for those SWEET POINTS LOL
Don't use your emergency fund for that. Use another savings account
@@grod805 big expenses = big problems. house repair, car breaking down, etc.
come on dawg who gonna use their EMERGENCY fund to buy TVs and shit?
It sounds like a legitimately good idea so long as the credit card balance was paid off immediately. I would otherwise reserve using a credit card for gas and a rental vehicle.
DjArmedWolf this is what I do! Anything that I can put on the credit card I will for the points! I always pay off the balance in full so it’s really just free $ that I apply to every payment at the end of the month
Hey bro instead paying off instantly invest the money in market and before due date pay money back.
In this way you will earn points as well as some return on your money
I have a $50k emergency fund. It’s a little excessive, but I don’t worry about anything. It’s kinda dope.
Put that into high interest savings account and see what will happen.
Put it into the s and p 500 because your money will lose value over time just sitting around and you will be making money from now on from your emergency funds so it will grow with time and you will put no work in
It will lose value to inflation and I don’t want all that work you put in to grow that emergency fund to go to waste
I could also lose it in the stock market, I could lose more of it in penalties should I pull it out early to cover an emergency or job loss. Also, my income is high, so if 50k slowly rots away but gives me insane piece of mind, I’m cool with that. Not everything is about profits, sometimes it’s about comfort.
@@Jimmy-ph8xn the s and p 500 is very safe long term just having a bigger emergency fund is better in general because if you have multiple emergency at once you could pay them off. 50,000 is still a lot don’t get me wrong but I would consider spending 50percemt on the s and p 500 l. But again not my money not my choice
Such a pity that RUclips doesn't have a "Love" button! This video deserves 3 of them!!!❤️❤️❤️
Aww, thanks Namrata!
Theres a fine line between emergency fund and just being rich.
lol the last three years of my life have been one of those "sprints" you speak of. It feels great to know that if contracting work dries up, I have income to fall back on
That's amazing Ted. Hard work, but so worth it in the long run. Keep it up! -- Philip
@@TwoCentsPBS Love your series. You're doing a wonderful service to humanity
I fell in the shower and broke my big toe 3 years ago in December. I had to take medical leave for a month and my salary was basically halved. This was at the WORST time possible; what with Christmas and family get-togethers. My savings got me through the month, through the holidays and to my first paycheck after I got back from work. So yeah, save, save,save; because u never when life will knock the croc out from under you.
I stopped working on just paying off debt. Now I'm paying off some debt every other month and saving more money each month.
This way I am Putting away money and getting out of debt.
I do the same. Just paid off my car 2 years early on the loan back in September and still kept 3 months of expenses in my bank. Now I'm working on getting back up to 6 months of expenses and paying off my house at the same time
Pay off your debt. You are building an emergency fund so that you won't have to get into debt or worry about getting into debt but you're already in debt. Don't prepare for a problem you're already in ; fix your problem and then prepare for a next time.
@@guy_5108 the only problem with that is what if you pay off debt and drain your bank account then immediately lose your job afterwards? you are screwed, you can't pay bills you can't buy groceries, you can't do anything. debt can be managed or in some cases delayed during unemployment. an empty bank account can't be
ano070602 I have a similar mindset recently. I want to pay more than minimum on my student loans, but I realized I need more savings to truly feel like I’m in control financially, not just spend a bunch of money on debt that will take years to pay off anyway.
@@drunclecookie216 I agree. I was in a similar situation when I had to move cross country and it took everything we had to move. We had no choice we had to move.
Now we are slowly climbing out of debt but setting aside funds for just in case.
Damn....a 7.94 APR? This is why I always go with a credit union.
That's my credit union credit card interest rate. My other cards have 20% or more
M Detlef it really isn’t the worst idea, especially to build credit.
M Detlef borrow a few thousand dollars, at low interest from a credit union? Something I could pay off at anytime. Establishes credit history
Damn, imagine if people listened to this advice 4 months ago when the video was released. Good timing!
The whole concept of an emergency fund is not about its utility in a crisis. The "emergency fund" construct is about teaching delayed gratification. Anyone who can build an emergency fund is also someone who never needs it. Building one is about developing the discipline to navigate finances properly.
No, it’s very much about its utility in a crisis. That’s why it needs to be kept somewhere that it can be liquidated in an emergency.
If a rich person has all their money in long term bonds, then they can still get fucked by not having an emergency fund that they can liquidate for an emergency.
The discipline you talk about is just a nice side benefit.
All these great budget videos are coming up on my No spend November :D it really motivates me to keep going
The no spend november... right before the throw it away december in gifts.
@@0xjrr do a gift exchange with a budget amount with the family so everyone is covered :)
Building up an emergency fund is hard and not easy. - One thing you can do is: - If you receive direct deposit from your employer, ask your employer if you can split your paycheck into 2 different bank accounts. - If the answer is yes, open a second bank account (Preferably at a different bank you don't use). - Ask if you can put say, $20 into this second account every paycheck. - If being paid bi-weekly, that should equal to about $40 month (If you can do more great, if not no big deal). - Check-in on it once a quarter. After 1 year, see how much you have.
Kia ora (greetings) from way way down in New Zealand/Aotearoa. All your videos make cents! Sorry hope I win the worst pun award, haha. On a more serious note I am amazed and shocked how many people up in the US and down in NZ take out a loan to buy a car. I have always bought used cars cars and they have been reliable overall. Thanks again for your awesome video's from an admiring Kiwi. Ps, I have an emergency fund. Cheers, Richard
I always say: “if a problem can be solved with money it’s not a problem. It’s an expense”.
Relevant data suggests: You need to calculate your monthly expenses, then add 20%. Multiply this by three, and that's what you should have at all times in cash or in a bank account
Keep your emergency fund in a high interest savings account, so its easily accessible and earning some kind of interest.
Not possible nowadays. No rates whatsoever for accessible accounts.
My bank lowers it even to 0.01% in a month.
@@MetallicReg you are clearly not doing enough research if you are only seeing 0.01% interest rates.
In Canada, I’m earning 2.8% on my emergency fund
@@CharleeWayne yeah with all the Fed rate cuts taking place in the US, you'd be lucky to find anything higher than 2.1%. I'm jealous of that rate you getting.
Good idea! I'll book an appointment with my bank! 😊
A not as popular way to get an emergency fund is to prepay all your monthly bills for several months and get ahead of the game. So have your mortgage/rent paid for the next three months in advance along with your utilities. Pay all your bills immediately when they come in also buying you time in an emergency. Of course you have no CC debt which gives you a 45 day interest free loan when you make a charge now moving you up to 4 months...I've been doing this for decades and when cash flow is slow this is a free ride until things are back to normal.
my friend cut out avocado toast for 6 months, he is now on his way to space!
Fantastic video series this. Really very well presented.
I love the analogy that using a credit card as a emergency fund is like using a weight jacket as a life preserver 🤣🤣🤣🤣🤣🤣🤣
I deny the statement. Credit card is a doom unless you are a disciplined person. Use the credit card as cash. This is how i use credit card.
Suppose i purchase goods worth $100. I have the cash to pay but i use CC and invest the money in stocks for the credit limit period. So when the due date is near i withdraw the money from market and pay credit card.
So here i made money using CC. To me this is tricking the system.
@@animenomad4186 You are forgetting ine thing. Risk! If your investments fail then you are on the hook for the CC payment.
Also, most people are not doscilined to the point where they will pay off debt if they were that disciplined, this video or this conversation would not have happenned.
@@animenomad4186 You missed the point. You use your card responsibly, spending what you have.
The video says that if you suddenly need $3k that you don't have and use your credit card to get those $3k now, you're screwing yourself over. The "heavy" interests in the credit card you've just used as "life preserver" will drag you down into debt.
@@animenomad4186 Smart, until the market crashes 10% for a couple of months until it slowly recovers. In which time, you are out of pocket.
@@shanelawrence7438 If the stock market crashes 10%, that doesn't mean everything crashes 10%. Some stocks are recession proof and may not budge, lose only a point or actually go up. It's good to have a diverse portfolio so you can choose what you want to sell if you need emergency cash.
Plus that 3k credit bill from the water heater... if you and your spouse can't pay that off when the bill is due in 30-45 days from your combined paychecks, you have other problems.
Thank you...really I mean it. Thank you. This is great info. I'm going to do this.
I love the 4 in Run the Numbers. It's so determined!
Since my emergency fund has finally grown large enough I've been raising some of my insurance deductibles. The way I see it in an emergency I can now afford to cover those higher deductibles. I figure, why pay extra to the insurance company for a lower deductible when I can pay them less and easily cover a larger deductible.
Wonko42 I did the same with my car insurance this year.
I did this too, knowing you have the cash available and raising the deductible also lowers the premium.
Little known insurance secret, carrying higher deductibles decreases your "rating" and will lead to higher premiums over time.
@@Oncopoda Not surprised. They're going to get you one way or another. When I reduced the coverage on one of my vehicles, my rate went up to exactly where it was before. When I added the coverage back, the rate stayed the same. If I'm going to pay for it (and I am), I might as well have it.
@@Oncopoda that, sadly, sounds about right. While I'm inclined to believe you I'd also like to see some sort of source or study on that.
at 2:28, the sound is a bit off-sync.
Tony Zhang how is this video 1minute old and have a comment from 8hrs ago?
@@tiffanyvoss3966 Is the video came too early or maybe there was some error?
He's the editor and uploader.
@@tiffanyvoss3966 Members in their Patreon community has a 24hr early excess.
You guys Called it... Corona virus definitely left some people wishing they had an emergency fund
I just found this channel a couple days ago and have been watching way too many of your videos they’re great.
I JUMPED TO WATCH THIS
(love from the UK)
Awesome, thanks so much!
I remember the days with my ex wife where we had no emergency fund or savings of any kind. We had a house of cards where the slightest sneeze could and finally did topple it over. Many nights were sleepless because of worrying about money. We lost the house. I was on the brink of bankruptcy and my ex wife left because I refused to keep working 2 full time jobs trying to support her and she told me life will be better without me.
Fast forward 8 years. We divorced and I met and married a wonderful woman. I paid off all the debt I had. I bought another house and paid it off in 6 years. I am completely debt free now with a good emergency fund while my ex wife has since filed for bankruptcy since.
Moral of the story is make a new budget every month. Allocate every dollar you have coming in to something. Live under your means. Avoid ALL debt and have an emergency fund. Most of the time if we have an unplanned expense we can cash flow it and not touch the emergency fund.
It also really depends on the partner you are with. Thank goodness you found happiness now.
@@Vibrantly_Monochromatic definitely. My wife and I may not always agree on everything but we make sure that we work together and we’re in agreement when it comes to money.
I'm happy for your amazing success bro. Good work my man! But I also feel sorry for your ex wife!
This needs to be on PBS kids.
Love Two Cents! Your info graphics is always outstanding! Major inspiration for me!
People like me who work a normal job, use 1/3 of salary for only essential. The rest goes to savings since i dont know what i want to buy,just feel like i have everything i need. the fund now can last me 2.5 to 3 years now if i suddenly go jobless.
i just started working 3 years ago.
the best control of spending is you dont need to control at the first place. SImply dont buy stuff to get a dopamine surge
I make over the median near a major city and I can barely save half with how expensive housing is around here sharing 1 bedroom apartment with my wife. I can't imagine how people even afford to live making minimum wage given the housing expenses.
@@berksarioz969 I suppose u are on track, understandably, spending is depending on locations and income range, as long as everyone here is doing thr best they can to save is already a step forward.
I'm from a 3rd world country, arguably my savings although takes up high percentage, my purchase power is relatively low, where if u save even smaller percentage, u have higher purchase power.
As I progress through career I suppose I can save even more aggressive, an 1k dollar raise, is 1k dollar directly to the bank, raising 0 extra expenses.
PS: I still earn below median income despite working as professional engineer.
Try investing some of it into stocks / etf / p2p / crypto.
Not alot, small steps.
Thats what i do. Emergency fund always backing me up for bad situations so i dont have to sell my stocks or stuff.
Between you guys, Dave Ramsey, and Chris Hogan, there’s no way to be financially blind anymore!
That said, once this check gets cashed, I’m debt free & starting saving and investing to be financially independent and wealthy!
Thanks for all that you do!
Congrats!! I love DR and CH. They really changed my life and my mentality early on.
That's amazing, congratulations! What a huge milestone :)
@@TwoCentsPBS you guys (with Dave Ramsey) are saints.
I strongly recommend watching the Financial Diet too!
Check out minority mindset too
THIS IS SO IMPORTANT!! - Great video you two!
Wow , I just realized I do have an emergency fund but need to feed it more. I have a habit of withdrawing $50 from each check to put in a nest egg I keep in a safe. This keeps the money safe from....ME. Since I have a stress spending habit that I am doing my best to curb with professional guidance, haha. What I like about the physical nest egg is that once I add the money, I completely forget about it till my next check. my goal with each egg is 1k then on to the next! 😁
Great video !
*Thanks for sharing this and the tips! Great work! An emergency fund is key.* 👍
Of course, thank you for watching!
See this is what I love about Two Cents you guys make finacial health and education so real and tangible instead of hoping a random textbook anecdote would suffice
Right!!
My emergency fund helped with an unexpected tax bill. I didn't like paying it, but I was glad I could.
Really helpful content overall.. Been binging for a couple hours. Thanks!
I love this show. More power to 2Cents.
After try all the efforts to financial freedom. From October 2019 i am trying to manage my cash flow by cash envelope method. I can clearly see the difference in my money management.
So now I save some amount from my salary as saving which will be emergency fund or any short of savings. ( as we receive 4% interest per annum).
If you can please do a video about cash envelope system, it may help many people to start financial freedom.
Best regards from Colombo, Sri Lanka
I lost my kids in a house fire at there moms it was really hard to deal with there lost and not have life insurance on kids is very expensive I had no money saved up besides 132oz of sliver I sold it to get the ball rolling I had to cremate and FYI life insurance for kids under 10 is free I did not know that then but every one should plan for everything and an emergency fund would of helped me form going through Financial ruin I am about 30,000$ in debt from borrowing from multiple sources and not have enough money to pay a lot of that back I’m focusing on one loan right now which is about 15 grand the other two are in collection and eventually I’ll pay them off but my credit score is bad and I am flat broke with bad credit and worse of it all i don’t have my family
That’s great advice.
But…..
Where I live, what I’m seeing and have experienced is that most employers today won’t pay you enough to live they only want to pay you enough to survive.
As long as they pay you enough to make your necessity payments and have enough money for gas to get to work each day then that’s all they’re going to pay you.
So how do you save when you only have money to survive on?
You may say, “ find another job.”
Good luck. That’s the problem most companies are like that today.
4:25 I don’t need to pay for medical bills! I have the NHS!!! The most my parents have probably paid is like £20 for an eye test and I don’t pay anything cause I’m a child
God Bless Amerr... oh wait
This is advice for americans lol
Wait, eye tests don’t cost 200-300$ outside of the us?
@@kjl3080 nope. I like the UK system btw which has the NHS and private hospital, whichever is best wins eh? I live in the UK as well btw :)
Even in a country with good health insurance you can have medical bills you have to pay. I live in a country that is ranked higher than the UK when talking about best healthcare. I still have medical expenses every month. I need medication and my body doesn't react well to the cheap variant, so I pay. Still not a lot, but it happens.
My ex-friends treated me as their emergency fund.
It was the day I learned that if someone call you mean, it is a compliment.
I had those, too. Man, you can go from super hero to straight Disney evil if you ever tell your 'friends' no. I was one of those friends who was never broke for the wrong reasons.
This show is like a public service!
I love you guys so much. Y'all brighten my day with every upload! 😃
You guys are amazing. I love your advice and really trying best to follow. Really inspirational and fun to watch. Keep it up you guys
Emergency Fund requires to be INTENTIONAL, focused and to LIVE BELOW YOUR MEANS.
Tip 1 : Pick a SPECIFIC NUMBER.
Tip 2 : Get ORGANIZED ( for real emergency only)
Tip 3 : SPRINT ( cut on expense and do work for extra money)
I set up a money market account within my credit union to put my emergency fund in
Thank you for the video, what tools would you recommend to "get organized" when someone has a bundle for all their savings?
I can't afford an emergency fund but my IRA. That is all I got ability for.
Question...how does one in poverty or edge of poverty afford everything and have savings? Some even with two or more jobs.
Asking for a friend? There are a lot of ways to make ends meet, but some are unpleasant. Get rid of your vehicle and use public transportation. Live in a house with multiple people and split the rent. Does your phone cost less than $100? Does your phone plan cost less than $40/month?
Jennifer Isaacs Try cutting back on expenses, getting a raise or switching to an employer that will pay you more, and saving as much as you can for an investment like starting a business.
@@Iffy50 I can't get everywhere I need to go without my vehicle and the cost of gas and most maintenance equals what the bus would cost me in a month.
I have to take my kid to the hospital on visits so buses don't go where I need the times I need.
@@combinacijus thanks. I already know my own budget. It is often I have to beg from a food pantry but maybe some day not at all.
@@Chamelionroses Let me make this very clear. There are many people who say that they can't make ends meet and when I actually examine what they are doing the problem is self-created. You are NOT one of these people. You clearly need help from family, friends, or social programs. There are a lot of options out there and they are made exactly for people like you. Unfortunately I don't know how these things work, so I can't really advise. I hope that you are able to get help!
Oh how timely this video was. Thanks to my emergency fund I am DEFINITELY less stressed due to the Corona Virus economy. Once those stimulus s checks come in they are going straight into that fund.
I split my stimulus checks in half. Half for savings and half for expenses while I got a job again.
An important issue is what exactly constitutes an emergency. Different people have different definitions at different times and/or circumstances. One person's emergency may be another's mild inconvenience. And sometimes you don't even know what emergencies you could possibly be in. That's why I don't have "emergency fund" per se. I only have cash, which I draw from and replenish regularly. If I'm low on that cash, THAT'S an "emergency," and I'll try to replenish it asap. I have about $15k of such cash. That's also the amount usually recommended, about 6-12 months of expense. I use it to pay everything that I need cash for, not just in emergencies per se. But as I said I also replenish it regularly.
This is one of the most useful channel on RUclips 👏
I have a 4K emergency fund I sleep very well at night
That's awesome. I never learned to build an emergency fund until I got in construction.
Woof that is good. Good on you. :D
I have a 4K TV with no money in my savings account
I leave the TV on at night to help me sleep
With what's happening around the world right now, this should be a must to every individual/family. At least a year worth of financial emergency fund. Governments/businesses needs to have this type of fund as well.
You guys are awesome! Thanks for sharing
i've saved up a nice little buffer in our general savings in prep for us moving out of state next year. I think i will have enough for us not to worry about the move and have enough to transfer to our IRA account before tax deadlines. It's a general savings though, and next year i want to get a little smarter and have one just for life emergencies and one for fun stuff (vacations and toys). Probably won't have much to start with but starting small is still a start!
My wife and I have needed an emergency fund twice in our life together, and only had it once:
1) right before our wedding when my rental property went empty for four months, and needed about four grand in repairs, and my wife's car had expensive repairs, and we had a wedding to pay for
2) just recently had the rental property go empty for a couple of months, 3 grand of repairs there, and about 3 grand between my car and tree removal at our primary residence.
The first time, we didn't have an emergency fund, and the second time we did. It's still a headache refilling the fund and cutting back for a little while, but the first time around we ran up a credit card bill that took us over a year to pay off completely, which was a nightmare. Refilling a fund feels completely different than feeling like your falling behind. That's our real life "why"
This is so inspiring! I really need to stop using my credit card😅😅
Selena Metz cut it up and cancel it! Doing that for myself was the best way for me to hustle and save without relying on it as an excuse not to
Thanks for the video. I am building up 6 months emergency fund :)
Thanks I needed to hear that!
I can't even imagine what would have happened 3-4 years ago when I was still scrapping and dragging myself through grad school.
Could you all make a video on good ways to build credit?
Get a credit card and always pay it off in full every month.
I don't know about other countries, but if you're in the US, the easiest card to get is a gas card from one of the big oil companies. It's hard to overspend on gas; a car can only hold so much, and you can't be tempted to buy crap you don't need, since it isn't good anywhere except at the pump.
Thank you for all you do. The is some value education
For a kidnapped and ransom incident, emergency fund is muchly needed
Everyone in Europe with free healthcare: *smiles in european* 🇪🇺
it aint free, everybody pays a little bit for it, to be free when needed.
In the US, we pay every month into an insurance with terms where every year you have to renew it and whatever you paid last year does not roll over for the next year. You can go years not needing insurance but when you do, none of the money you paid in all the previous years goes towards your treatment. In fact, you have to make a "deductible" where you have to pay 2k to 5k$ out of pocket before you get the insurance to pitch in. (This 2 to 5k$ renews every year too so if you were 1 dollar away from hitting the deductible in Dec 31st, by Jan 1st you have to start from 0 again. That deductible depends on the plan; the cheaper the monthly payment, the higher the deductible. Also, insurance companies try to find ways to not cover treatment in order to maximize profit. Not only are people in the US being ripped off by insurance companies, but from hospitals and clinics as well with no price transparency and rarely you can know how much an operation will cost in advance until it goes through billing. In emergencies, rarely do you even have the luxury of even stopping to think which hospital will be cheaper because your appendix will explode any minute. Also the drugs we get are many times more expensive than in other countries. What I've explained is just the tip of the iceberg. It's a scam within a scam.
Question!!!!! ✋
Ok so I have my emergency savings to cover me for 3 months. Where am i supposed to keep it ???????
chocolatechick729 I keep mine in my savings account that’s linked to my checking account (it’s at the same bank). It’s separate so I’m not tempted to spend it, but it’s easy to move money over if I need it. I have also thought about putting it in a separate bank, but it takes to long for me to move it. I hope that helps!
And +1 to a high yield savings account! The interest rate you get at a local bank is usually going to be pretty low; if you're not doing this already, consider putting your savings in an online savings account, as they can have much higher interest rates. NerdWallet maintains a list of the best savings accounts; just Google to find it. But be aware that Cade above is right; to transfer funds from bank to bank can take a couple business days, so you need to plan accordingly.
In a high yield savings account! I have my checking account and savings account separately with 2 different banks so i won’t get tempted to touch it or try to transfer money from my savings
These videos are really amazing. Thank you.
one time my parents couldn't pay my tuition fee for the upcoming semester in time, luckily I've saved up for emergency funds and It really useful on times like that.
I personally live on half of my paycheque and everything goes into savings. I recommend this to everyone because you become truly free and can sleep well at night. Nothing can stress me right now - not even losing my job.
Brother do not keep the money in bank as you will loose money to inflation rather invest it in a mutual fund or if you have knowledge then directly in stocks
@@animenomad4186 I understand that, but not having physical money next to me that I can react and be the first to invest if opportunity arises is currently more valuable to me. I do not understand investing in index funds in my country (EU, Germany) - when can I sell my funds? how much do I need to pay to goverment? how often can I withdraw? etc... to be comfortable investing in stock market.
@@noctreik umm you are right you should not invest all your money if you are a newbie to stocks and opportunity cost is right but instead of a fantasized big opportunity in future atleast slowly invest half of your money in stocks. That way you will gain knowledge and also way higher return compared to savings. Now i do not know how investing works in Germany as i am Indian. I would suggest you know about your stock exchange and the stock brokers and their brokerage. Trust me i was also like you, i feared the market a lot and thought of mutual funds as scams when i was younger but now i rejoice that i pushed myself for my bright future.
Man mark my words 10 years from now you will cherish that you decided to move towards the market.
Now is the best time to take charge of your life for greatness and understand times like these are best for investing as you get good stocks at low price.
You are in the first step of financial freedom where you save rather than spend.
Brother i said all of these as i feel you want to achieve something great in life and want to be fully prepared when time comes.
@@animenomad4186 Thank you for putting in time to write this message
@@noctreik learn about bitcoin research well it will help also nexo or celicius or compound
Started my first job a few months ago. I'm a senior in high school so when I first started thinking about my finances I knew I had to have an emergency fund unfortunately it seems like there's not a lot of financial advice or help for teenagers on the internet which is a shame because it's important to start these habits young. What I did was I decided that I was going to put 10% of my monthly paycheck into an emergency fund every month equating to about $75 each month in the fund. I have $225 in my emergency fund and going to put another $75 in it this month.
That's awesome! I wish I'd been smart enough to start young. :D
It doesnt have to be specifically for teens. You can use the advice given to adults and apply it to your situation. Its easier for teens to save anyway because yo uusualy do not have to pay any bills! But they just usually dont save... instead they spend their money on video games, food, makeup and Jordans (i dont understand this obsession with basektball sneakers at all). Just make sure you always have a savings of some kind. That is really importat.
@@emily_nelson same but I rather learn now than later
Their was a system in place in Belgium:
You could buy a house and have a morgage. Where the intrest you payed (now because of low intrest) was about 20 000 or 40 000 euro's on the loan. But because of that 'system' you could put that in tax reduction. That tax reduction would save you €20 000 to €40 000 on taxes over 25y (25y is the most used lenght of the loan).
Meaning: you just could get a loan for a house intrest free.
To bad, the gov axed this system in 2019 with only 3 month of notice. Meaning buying a house in 2020 and beyond didnt get you any tax reduction. Their was a real real rush on the real estate.
I would expand on what was said in the video about having emergency funds in a separate account. I have short-term emergency savings in one account for typical auto repairs, household repairs, and so forth. Maybe 1 month of expenses worth in that account. Then, I have a higher interest money market that's intended for longer-term emergencies -- unemployment, medical emergency, etc. It's about 3x monthly expenses. Then, finally, I have an index fund as the final, less liquid, emergency fund, in case things go badly and the other 2 accounts are depleted. It's the balance of emergency savings, maybe another 3-5x monthly expenses. I think of them as my moat, outer wall, and inner wall defending me from life's financial emergencies. :) I guess my retirement savings is in a chest in the inner keep. lol
Question: Why do you need an emergency fund?
Answer: To be safe throughout the wuhan covid pandemic.
You both are so sweet.. ❤️
Thanks for making such useful videos. 👍
Came from Dave Ramsey's podcast. Both that and this channel have taught me a lot on personal finance (18 yo here). Difference is Dave's channel is quite brutal in approach while this is very uplifting and easy to understand.
Luckily I did not have such an emergency which needed to be covered (or wasn't by insurance) yet but in any case I have saved up enough cash to be able pay most important stuff (rent, car payments and insurances) for a year. Yeah I had to live for couple more years with my parents while I built it but thanks to their support both of them and I can sleep more soundly :)
Dave Ramsey is one of the greatest financial advisors ever. His first baby step on the way to "living like no one else" is saving a $1000 emergency fund. This may arguably be the single most important step to becoming financially fit, since building that emergency fund is essentially dedicating your commitment to building wealth. It's a true safeguard to keep Murphy away from your house.
I wouldn't give him that much credit. He explains to adults how they shouldn't live beyond their means, which is something that should be common sense. He also doesn't believe in credit cards, which if you're smart enough to pay off every month, is literally free money/points you're getting to spend what you're already spending
@@Jake-pi3yh I mean yes, there are some advantages to credit cards compared to debit cards, but the sad reality is the fact that people try to spend the money they don't actually have. There's a reason why our country is in trillions of debt. Dave Ramsey is well known for his method (the debt snowball) to get out of debt. But if you could go your entire life with no debt at all, that's something to be proud of.
Hola amigos !!! Aquí en España los abuelos y padres de los babyboomers ( nacidos en los 60 y 70 ) eran muy frugales y con lo poco que ganaban ,ya que fue la generacion de la guerra y la postguerra , la mayoría ahorraron para tener su propia casa ,algunos hasta dos ademas les dieron estudios a sus hijos , iban de vacaciones si podían al pueblo y no tenían deudas. La generación milenial alquilan en cuanto tienen el primer trabajo , compran coche , fiestas y vacaciones...y quieren pisos nuevos ..compran ropa on line, comida on line , conciertos , Netflix, gimnasio etcccc claro en una emergencia , imaginaros 😨!! Un abrazo para todo el equipo desde Madrid 💕💕💕💕
Two Cents is great! You deserve a million subscribers and more. 🙂
Thanks so much guys, as someone who has never focused on being financially competent nor had good peer role models around me to learn from, your video series has given me the self esteem I needed and now I have saved up almost $10,000! Before this I used to spend on my paychecks on frivolous things like restaurants and electronics. I can't tell you how much better I fall asleep at night knowing I have many months worth of rent in the bank. Before, losing a job got me evicted and put me into a homeless shelter. I will never return to that life again!