Be financially disciplined with CalendarBudget, the best money management software. Maintain an emergency fund and prevent debt created due to emergencies.

Last year, an unexpected complication happened in my wife’s pregnancy which ended up with her hospitalized for 2.5 months and I had to take an unpaid leave from work to care for my other children. That left us with no income, living off our savings for that time.

Luckily it all turned out well in the end, but while it was happening, we were fortunate to not have to worry much about the finances, because we’d heeded counsel to have a “rainy day” or emergency fund. We kept about $4000 in this account, which we had saved over a period of a few years, along with our regular retirement savings.

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Our emergency fund was liquid, meaning, it was just regular savings account that we could withdraw from as needed. We’ve used it for unexpected expenses such as auto repair, hospital trips and broken household items needing a replacement immediately.

It’s a good practice to have an emergency fund that you don’t touch except in true emergencies, and then after using it, try to replenish it as soon as you can. Hopefully, you won’t have too many emergencies close together and this way you don’t have to go into debt when these inevitable problems occur.

How much should you save? It really depends on your lifestyle and income. For me, I try to keep about $4000 there, sometimes it dips down to $1000. I try to keep it above $1000 always to avoid debt.

Do you have an emergency fund? How do you handle financial emergencies?

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