Emergency Fund - What it is and How to set it up?♥

source: Google.com

Emergency fund - What is it?  It is a fund that is set up as a safety net for unexpected expenses, like major car or house repairs, emergency illness.

Why do we need it?  Like what happened last year if we don't have savings or an emergency fund to cover the months that we are on lockdown.  Where can we get the money for our daily needs and to pay for our monthly bills?  2020 was really an eye opener for me and maybe for all of us.  I started setting up my emergency fund in 2019, it's not that big but it was a great help during the pandemic.  

How to set up an Emergency Fund?  Determine or compute your actual expenses for the month : Expenses such as meals, gasoline, utilities and etc.  From there you will be able to estimate how much emergency fund you need to set up.  

How much should I save?  You have to save at least have 6 months to 1 year worth to cover your living expenses.  In my case, I started saving a small amount of money and I tried to increase it if I have extra income.  I did this religiously every payday.  Now I am back to square one since we went back to work last May 2020 when the ECQ was lifted.  

I know it's not easy at first but you have to do it.  I admit I really regret doing this late, I should have done it when I was a little younger. 

Hope this will inspire you to set up your own emergency fund.

xo,

Chiq♥