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Rainy Day Fund

Updated on February 22, 2015

So now you have your financial plan in place and you want to take the next step towards financial freedom. You need (and I stress need) to build up an emergency fund. This “rainy day” fund is essential to making your financial future brighter. If you rely on your credit cards for emergencies you will forever be in emergency mode. Going into more debt every time there is a crisis will eventually led to a financial crisis.

Most people recommend three to eight months of emergency funds; however, I think you should do whatever amount gives you the most comfort. For some that will be three months of expenses and for others that will be two years. All I can tell you is that you need this fund in place as soon as possible.Think about this. If you had to save that amount to save your life, you would get ten side jobs to make it happen. You should treat your financial life with the same importance that you treat your health because this fund will help save you financial life.

Let me clarify that this money is not for investing. You should not have this money in stocks or mutual funds as the volatility of the market can leave you in real bind if you need the money when the stock market is down. A money market or savings account at a different bank from your checking account is a good place to put it so that you have easy inconvenience access as this money is only for true emergency.


  • Car breaks down
  • Appliance need repair/replacement
  • Owing unexpected taxes to the IRS
  • Loss of job
  • Illness

Not An Emergency

  • New shoes
  • New car just because you want to upgrade
  • Christmas
  • Getting hair done
  • Getting nails done

If you put this emergency fund in place you will see that emergencies are no longer emergencies-just an inconvenience.


1) Figure out ways that you can start saving for your emergency fund.

2) Join me here tomorrow.

3) If you have not already done so, check out


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