The most important thing you can do to make your personal economy strong is to have an umbrella—a Contingency Fund, with at least enough money to pay all of your bills without a paycheck, for three to six months.
Call it $10,000. Weekly, try to save 10 percent of your paycheck. It may sound like a lot, so if you can’t do 10, start with 5 percent or even 1 percent and build up.
Deposit the money automatically into your Contingency Fund; you won’t miss what you don’t see in the first place. Okay, you’ll miss it for the first few months, but soon you really will not miss it.
Until you have a fully-funded Contingency Fund, approach this with scorched-earth determination. No spending on anything that is not necessary or legally obligating until you reach goal. Read more