When things go sideways, as they inevitably will, you’ll need cash.
That’s what the rainy day fund — aka the emergency fund, savings pool or cash stash — is all about.
Generally, the rule of thumb is three to six months’ expenses. Some experts even recommend tucking away even more.
Is that even possible?
Less than zero?
Don’t be put off by the daunting numbers. Your goal should be to start establishing savings earmarked just for emergencies.
Chartered financial analyst Leslie Thompson, managing principal of Spectrum Management Group at Carson Wealth in Indianapolis, recommends people save up six months of salary — but she means after taxes and other expenses are withheld.
Here’s how to prioritize: First, work on reducing debt. Second, work on building up a safety cushion. Long-term savings is No. 3, Thompson says.
Part of the goal is not the actual money. “It’s building up the discipline to save money,” Thompson said. Set an auto payment through your bank, or try an app like Tip…