You are doing pretty well in Austin. You got a great job, a condo, a sports car and a date with that cute new guy in marketing. What can go wrong?
Plenty.
This is Austin, anything can happen – a layoff, a car accident on MOPAC, a slip and fall on the wet pavement at Barton Springs or some serious food poisoning from a food truck parked at the gas station around the corner.
Will you be ready to cover your bills if your pay check ceased for a few months? The purpose of an Emergency Fund is to cover your payments while you find a new job or regain your health.
Capital Budget Strategies, LLC, Austin’s best financial coach, suggests you have enough cash to cover 6 months of your nondiscretionary expenses. That means covering your mortgage, car payments, transportation, food and utilities – not SXSW or ACL tickets.
As Austin’s best money coach, we know a trick to determine how many months of savings you actually have saved – use this at the next Austin happy hour on 6th Street and you’ll be even more popular than you are now.
Step 1: Add up all nondiscretionary expenses for one month (your “nondiscretionary total”).
Step 2: Add up all your available cash (your “cash on hand”)
Step 3: Divide your “cash on hand” by your “nondiscretionary total.” The answer is in months. You are looking for a total of 6 months.
Extra money tip: Multiply your “nondiscretionary total” by 6 to find out your Emergency Fund goal.
Living in Austin is great – but stay inside in the August heat! Just don’t let an unforeseen accident or event leave you without the finances to carry on.
Or have fun moving back to your parent’s house in West Texas!
For only $149, Capital Budget Strategies, LLC, Austin’s best money coach, will help you create: A personalized budget, set up an emergency fund, a payoff plan for your debt (credit cards, school loans, vehicle, etc.) and begin saving for retirement.
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