An ounce of prevention

Document created by np_1 on May 31, 2016
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Before I even moved the tassel from the right to the left, I was a little bit anxious about finding a job and repaying student loans. During graduate school, I received some very valuable and practical financial advice that has had a large impact on my finances. That advice was to devote a chunk of money toward building an emergency fund to help out with the inevitable occurrence of unanticipated and costly things that can go wrong. I was advised to do so, even at the short-term expense of paying off some debts.  The initial goal was small; even as little as $500.00 in reserve can make an unexpected car break-down or tax shortage easier to handle (though not necessarily enjoyable). My fund was built slowly, using money earned from working extra shifts, cashing in change, tax returns and any other miscellaneous cash that I could spare. Because of this emergency fund, life's unexpected expenses and acute financial stresses are relatively painless. I have been able to avoid racking up credit card bills and paying interest for things like extra heating oil because the winter was long and cold, or new tires because the potholes took their toll.  In addition to saving money, this approach has also eliminated a lot of the stress that inevitable accompanies unexpected expenses because I know that I can handle most expense likely to pop up.  With any luck, future emergencies will remain at bay until I can build a larger emergency fund that will cover several months of living expenses. Whether or not they do, I will always be grateful for this piece of financial advice.