Why is there a river running out of my front door?

This is the question I asked myself as I was approaching my front door about 18 years ago. As I opened the front door, a flood of water poured out. The pipe under the kitchen sink had burst. It is amazing how far water can go and how quickly it can damage things. Why do I bring this up? Recently, for an interview I was asked what I felt was the most undervalued investment? While my answer is technically not an “investment”, it is the most undervalued. I am speaking of your emergency savings.

Not enough of us have an emergency savings account but everyone has emergencies. A pipe bursting, the A/C unit dies, you roof needs to be replaced -these are items most do not prepare for. These are the items that just may push someone into a financial tailspin. We all need to save at least 3 months of expenses, more if possible. This account needs to be tucked away for an emergency. That is it; you do not touch that account for other purposes.

Give yourself the peace of mind necessary to deal with your own river coming out of the front door.

 

disclosures:http://www.hechteffect.net/?page_id=31