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6. Not Having Emergency Fund
Emergencies happen to all of us. It’s doubtful that anyone is immune, however some people are much more prepared than others. One of the best ways to ensure you will always have extra money when you need it is to create an emergency account. Financial pundit Suze Orman suggests saving enough money to cover expenses and debts for eight months.
Many young couples figure this is a pie-in-the-sky amount and forget about it entirely. Yet, any amount socked away for emergencies will end up saving you in the long run. Here’s why: when you are in emergency mode, you are stuck with whatever quick fix you can find to eliminate the emergency. If your washing machine breaks down, for example, you can’t wait for the next sale or waste time applying for a personal loan. Most people will wind up buying the most convenient fix available, which will inevitably cost more. Bottom line is that not having an emergency fund will ultimately get you in worse financial shape, with few exceptions.
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