Build an Emergency Fund

No matter how careful or responsible you are, sometimes things just happen. You get into a car accident, your cat eats a sock and needs emergency surgery or you lose your job. When those things happen, you’ll be glad you had an emergency fund. 

An emergency fund is an amount of money used to cover unforeseen expenses or things you can’t predict. While some things – like your car needing an oil change – can be planned for, others can’t. Ideally, your emergency fund should have between three and six months worth of expenses. Note: that does not mean three to six months of income, unless you’re living paycheck to paycheck. 

If you have an emergency fund set up, you won’t have to rely on credit cards, payday loans or title loans when something comes up. This will save you money because you won’t have to pay unnecessary interest.