Wahm Forum - Your "Work-at-Home Moms" Support Group

christina · Sat Sep 15, 2007 3:40 pm What's Frustrating...

Personal finance can be a tremendous source of grief, frustration and heart palpitating stress. What do you find most frustrating about managing your personal finances?

Let's chat about it and maybe together we can find a stress reliever for ya.

wahmannounce · Sun Sep 16, 2007 1:26 am

The challenge we are facing now is that we want to set up our own emergency fund. I believe they recommend having at least 6 months of your normal income in savings. If you lose your job or a major crisis arrives it will help you stay on your feet a little better.

I'm aiming to set aside a certain amount each paycheck to save up. However, we also have quite a few projects that we need to do on our house, so we are going to feel pulled in two directions as to how to prioritize our money.

christina · Sun Sep 16, 2007 2:26 am

An emergency fund is crucial to be sure. Not just for peace of mind, but it protects you from the "d" word. The "d" word being debt of course. An emergency fund should be 3-6 months worth of income. It's like an insurance policy against debt. lol

Because you never know what life will throw at you it's recommended that you make funding your emergency fund a priority. The struggle that I've seen with people is they are torn between wanting to fund it fully and getting completely out of debt. At least you don't have that dilemma, Rhonda.

For those who do have debt, the best thing to do is start a baby emergency fund and get it funded as quickly as you can to $1,000. Then tear up your credit cards, close them and focus solely on paying off one debt/card at a time. Get intense with it until your debt is history. It's fun when the snowball gets to rollin'!! Once your debt is gone shift your focus to fully funding your emergency fund equal to 3-6 months worth of income. If you work straight on commission or have your own business I suggest saving up six month's worth of income. Actually, with the instability of jobs and the economy being what it is I'm not sure anyone should have less than six months of income in an emergency fund.