Q: Do I really need an emergency fund? If worse comes to worst, can’t I just use one of my credit cards in a bind? I have about $20,000 in credit limit between 3 cards.

A: This is a great question. The answer is a resounding YES you need an emergency fund. Think of it as an INDEPENDENCE FUND. This is because if an unexpected expense comes up, you’re gonna feel a lot more empowered dipping into your savings account to pay for it like it’s no problem, vs having to be indebted to your credit card company because you don’t have the cash. And also, let’s pretend your interest rate is 15%, and you take a year to pay off that emergency – lets say it was $5000 – it’s really going to cost you closer to $6000.

Commit right now to start saving, and make it a habit. Automate it if you have to.

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