I will forever be grateful the Lord put the right people and resources into our path over 6 years ago! We are working our way through Dave Ramsey's 7 Baby Steps to Financial Freedom. Based upon our weekend and the fact we do not necessarily know the cost the lightening damage will be; we are thankful for a reserve of money that is only touched for emergency expenses.
Baby Step #1 - Have $1000 in savings. Dave says to get that ASAP! You may need to sell something or drastically cut your budget back to get there.
We have found that even this much may not be adequate. Every year we set our budget and in addition to our 6 months of saved living expenses we have an "emergency fund." This fund is reserved for paying for anything unplanned for home and car. We have high medical bills each year so medical expenses are not considered in this budget. We have a separate savings for that but if you are healthy and don't have children with medical needs, this could also serve for any unplanned medical expenses.
What could be an emergency? Anything that must be replaced or fixed immediately. With our recent lightening damage we weren't sure if our TV downstairs would work but even before we tried to turn it on we both agreed that a TV would not be an emergency need and we would not dip into our fund for that.
I encourage all my reader friends to build that emergency fund to at least $1000 ASAP and maybe even more if need be. To learn more about Dave's Baby Steps you can visit here. This plan changed our marriage and the course of our financial future! I suggest it to all family and friends!!
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