Money will get you out of debt, but it won’t keep you out of debt. I saw that up close for years. Give someone $1 million and don’t teach them how to budget, save, and invest – and I promise you they’ll be down to their last dollar before they retire.
Many banks and credit unions now provide budgeting tools that make it easy to predict, say, how much you’ll save per month if you drink one less Starbucks latte a day or buy fewer lunches during your workweek.
An emergency fund isn’t just peace of mind. It can save you money because when disaster strikes and you’re not prepared, you often run up your high-interest credit cards – and carry balances for months or even years before you can pay off what you owe.
This works especially well when you get a raise. You can divert most or even all of it into your emergency fund, and before you know it, you’ll have enough to never worry about recovering from bad news.