Personal Finance Education – Emergency Fund

Every financially responsible man should have an emergency fund.  This is a fund you keep to cover you in the event of losing a job or some other unforeseen semi-catastrophic event (i.e. car explodes).  In this fund you should have enough to cover 4 or 5 months of living expenses.  To determine your living expenses you should look at all of your expenses in your monthly budget and cut out the extra expenses like clothes, gifts, etc…Be sure to cover this amount for 4 or 5 month.  Typically this amount should be about 2-3 months salary.

You should keep this in a high interest checking account, such as the one offered by ING Direct or HSBC.  If you click HERE this will actually gives you a $25 bonus for signing up with ING Direct (you also get a 3% APY).  Create the account, fill it up, let it sit…just in case.

One last thing…Do not worry about this money being safe.  Both HSBC and ING are FDIC insured up to $100,000.00.  (This means that the Federal Government insures you for every dollar you have in the account as long as you have less than $100,000.00, so no worries).

Please let me know if the ING Direct link does not work.

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