CORPUS CHRISTI, Texas — How many times have every one of us been in a situation where we need cash immediately for an unexpected, but necessary expense?
For car repairs, a medical procedure, something.
How many have an emergency fund?
In tonight’s protecting your money segment, we hear from a couple of local financial planners about the importance of an emergency fund.
"It is specifically for things that you did not anticipate a need for cash. If you have to have the cash, and have to have a lot of cash, then that's what that's for," Keith Clark said.
Clark is a financial adviser for Edward Jones.
He's one of the experts we asked about an emergency fund.
Gabriel Castillo with IBC Bank is another.
"An emergency fund has to be money that is readily available to you," Castillo said.
So it's an account you set aside for unexpected emergencies. It is not for:
1. A fancy dinner date three times a month.
2. It's not for buying fancy clothes or
3. Buying an expensive vehicle
"Do I really have to impress everyone?" Castillo asks, "with a new jacket, new sweater, a new car I can't afford?"
Castillo and Clark recommend you start building your emergency fund by designating 5-10 percent of each paycheck, and putting it somewhere where it's easily accessible in an emergency.
It's going to be a sacrifice at first.
So, Castillo suggests guidelines to establishing your fund:
1. Make sure you have health insurance for medical emergencies
2. Make sure you have a reliable vehicle
3. Budget carefully
4. Decide where you'll keep your emergency fund
"Life happens," Clark added. "You don't anticipate, you don't expect, but you're prepared. You're healthy and you're ready for the next emergency in life, the next unexpected event of life. And that's really what the money's for, is to be prepared for the things you didn't anticipate."