Page 57 - Charles Calhoun Book Rich As You Want To Be

say that your normal expenses are $5,000 per month.

Three months of expenses would be $15,000 and six

months would be 6 x $5,000 or $30,000.
Let’s say you have $15,000 in your emergency fund and

your car needs an $800 repair. Easy, just write a check.
Or maybe your water heater fails and needs replacing for

$1,000. No problem just write a check. Or maybe they
both happen in the same week. No problem just write two

checks. Without the emergency fund you might have to

choose from options that hurt you. You could use a charge
card and take on some debt. Or you could withdraw from

an IRA or other retirement account and have to pay taxes
plus penalties. Clearly having the money already sitting in

your emergency fund would be the most comfortable and
least expensive way to handle these or any emergency.

The reality is that unexpected expenses pop up all the
time. Be prepared with an emergency fund and you will

handle your emergencies with ease, and not create
another problem such as debt and interest payments.

Save for that rainy day. It will rain. Guaranteed!!

Main point: Life happens. Prepare for it.

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