Tag: budget

3 Things To Consider When Starting an Emergency Fund

Building an emergency fund into your budget can protect you from financial disaster and crushing debt from unforeseen circumstances, such as a car breakdown, unemployment, or a health crisis. Experts recommend saving enough to cover up to six months of expenses. That number might initially seem daunting, but focusing on these three key aspects can help you succeed.

What Is a Sinking Fund and Why Have One?

A sinking fund is a tool to save money over time for a big purchase in the future. You create a line item in your budget for the expense, like a vacation, car, or down payment on a house. You “sink” a bit of cash into the fund when you get paid. Eventually, the money accumulates, and before you know it, you’ll have the means to afford the planned item without experiencing a massive impact on your monthly financial obligations.

The 3 Most Damaging Types of Debt and Why

Debt can be a double-edged sword. On the one hand, you can use it to buy appreciable assets and grow wealth. However, acquiring the wrong kind of debt can sink your whole financial plan, leaving you worse off than where you started. In a climate where inflation shows no signs of slowing down, you need to know the most damaging types of debt and why you should steer clear.

What’s a Reverse Budget and Why Use One?

Perhaps you already have a budget set up to list your income and bills so you can track where your money goes each month. Unfortunately, traditional budgets can keep you from reaching your ultimate goals because the focus is on paying the bills and not reaching your life’s desires — enter reverse budgeting. Instead of simply having a goal to pay the bills and maybe have a bit left over, plan out your financial goals first and work on your budget to help you get there.