- Housing Expenses – rent/mortgage, utilities
- Personal Living Expenses – groceries, cell phone plan, allowance for personal purchases
- Transportation – fuel, taxi, transit
- Childcare – daycare, babysitting
- Healthcare – health insurance, dental insurance, chiropractic, etc.
- Insurance – life insurance, homeowner/renter’s insurance
- Debt Repayments – credit cards, student loans, vehicle loans
Being prepared for the unexpected, when it comes to your finances, is part of properly managing your money. Life is not linear and try as we might the future is not in our control. Emergencies come in many forms – job loss, medical expenses, vet bills, repairs to your home or vehicle – and often these things catch us off-guard and we are blind-sided. Preparing an emergency fund will keep you from relying on credit cards or payday loans for which can simply compound the problem. Many financial advisors suggest that an emergency fund should be between three to six months of living expenses. If you are not already using a budget spreadsheet to keep track of your expenses, your next step is to figure out what they are. 1. Determine Your Monthly Expenses The calculation of what you can afford to put aside for emergencies will include your fixed and variable expenses, such as: