Here’s a interesting video from Dave Ramsey and the $1000 emergency fund. Life sometimes will throw us curveballs and we need to be prepared when a financial crisis might occur. Dave Ramsey talks about how important it is to have a minimum $1000 emergency fund.
When is it OK to have a little fun, and buy things you want, when you’re following the Baby Steps plan?
A.: The time for a little fun is after you’ve completed the first three Baby Steps. Baby Step 1 is saving $1,000 for a beginner emergency fund. Baby Step 2 is paying off all debt, except for your home. And Baby Step 3 means you go back and add to your emergency fund until you have three to six months of expenses set aside.
Once you’re debt-free except for your home — and you have your emergency fund completed — you’ve laid a solid, financial foundation for your life. That’s when you can have a little fun and spend some money on a vacation, new furniture, or something like that.
Children think about their immediate wants and do what feels good. Adults, on the other hand, devise smart, logical plans, and stick to them. I want you to have a great life, but you have to put in some hard work and say “no” to yourself sometimes in order to attain that great life!
you are the one who is going to determine whether or not you’re going to be prepared for the emergencies that might happen in your life. Be prepared and be stress-free and now I’m that you do have a cushion in case something happens in your life beyond your control financially.