Money, the experts all agree that we should have at least six months of cash reserves just in case we lose our job. However, it won’t hurt to be even more cautious and have up to a year of reserves, just in case. So it might be a good idea to write down exactly how much money you need to save in order to prepare for the unexpected. Then take a calculator and take into consideration your income, bills, any interest payments, monthly contributions, inflation and see how long it will take you to put away enough money to tide you over for a year. Of course, we want to make as much money as possible and when we do we want to buy those goods and services that we crave. It could be a great way to live, but buying what we want when we want carries a lot of risk. Sure, when the money is coming in you can afford to buy what you want, but what happens if you get fired or have to pay for some sudden emergency? This is where saving for a rainy day comes into play.
If you get fired and have no money saved you will need to pay your bills and the only way to do this is to save in advance. You don’t want to wait for the unthinkable to happen and then start using your credit cards and piling up debt. That would lead to more bills
that you couldn’t afford because you would be unemployed. Debt on top of debt would make it impossible for you to maintain your previous lifestyle when you did find another position and you would have to make even more money to pay off the extra debt incurred while unemployed. However, if you had saved $25,000 and lost your job you would probably be okay for a year or so. You’d have plenty of money to pay your bills and you wouldn’t be stressed out. By having money saved one is prepared for any eventuality and better equipped to take advantage of opportunities that may come.