The first step in FPU is to save $1000 as quickly as possible, in a separate and safe account. This will be called our Emergency Fund, because sooner or later, an emergency expense will happen. Whether it is a car malfunction, a frantic trip to the ER for what sounded like a broken bone or that water heater who finally jus gave up on life, our reality is emergencies do happen. But when we already have money put aside on purpose for these unwanted events, what relief when they do come. There is no need to run for the credit cards and make a difficult situation even more difficult by getting ourselves into debt because of that emergency. The stress of the emergency becomes less stressful if there is not a financial emergency added.
An Emergency Fund grants us a reassuring feeling of freedom because we know we can meet that unexpected expense, with no sweat. The older generation would call this saving for “a rainy day.” This is not a pessimistic view, it is simply our reality…but even if you don’t have any emergencies, what a relief to know you are prepared just in case one does come along, right? So putting aside $1000 as quickly as you will help us have, and maintain, financial freedom.
<><Peace, Diane
