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Yeah. So my name is Prince Chenou.
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Hey everybody, I just want to get on here and really just talk everything emergency fund. So if that sounds interesting to you, please like, comment, and subscribe and let's get into it. Yeah. So my name is Prince Chenou. I work at a big financial institution and I really just make these videos to give back as much as I can to give any advice, wisdoms or tips that I learned throughout thus far and hopefully help somebody out there.
So really just want to talk about five things that has to do with the emergency funds. First, I want to talk about why do you need an emergency fund. Second, I want to talk about how much should you put into your emergency fund. Third is where should you keep your money at for your emergency fund.
Fourth is how do you even build up your emergency fund? And then fifth is when should you or when should you not use the money within your emergency fund. So, let's hop into the first thing. Why do you even need an emergency fund? So an emergency emergency fund is really used to replace income and when unexpected expenses happen.
We all go through life and things occur that we didn't expect. And so really having that money set aside help us to be able to have cash in those situations. So let's give some examples. one, let's say if you have a job loss or another, say you have medical bills that you may have to pay, unsuspecting medical bills, or let's say that you have car issues or car expenses that you have to cover that you didn't expect.
So, it's really just having a set amount of money set aside to really make sure that you have that cash and and it gives you that peace of mind knowing that you have cash set aside just in case any sort of emergencies were to happen that were unexpected. So, I'll give an example from my own personal life.
So, anytime I go to get a oil change on my car, the people they always tell me, they give me a whole wrap shift everything that's wrong with my car that needs to get fixed immediately or there's going to be my car is going to break down on me. And I never expected expenses, but I'm knowing that I have an emergency fund, I know I can tap into that and and have a peace of mind um in comparison to if I didn't have that money readily available.
So, let's go into the second thing. How much should you have in your emergency fund? And so, really, it just depends. So it it depends truly we try to say between three to six months of expenses but it really just depends on the situation. If you're a dual income family then you will lean more towards the the three month aspect because you have more income and cash flow coming in and so you can weather out any storms or any unforeseen expense expenses.
But if you move on to let's say you're an entrepreneur or let's say that you have very lumpy income then you will want to lean more towards a six-month expenses because you there may be a bigger or longer stretch of time where you just don't have money coming in. So it really just depends on your situation and you tend to figure out where you lean at when it comes to that.
So the third thing I want to talk about is where should you even keep your money in the first place and there's many places where you can keep your money and there's many institutions out there. I know you stand people like to keep their money within let's say a savings account or check account but that's earning 01% I want to say I'm not sure but it's just not earning anything at all and so usually like to recommend people to go towards a high yo savings account and there's many out there with many banks that you can use but that can keep your money liquid but then also in case of emergency you can easily pull that money out and so that helps you to be able to pretty much make money on top of your money because it offers higher rates in comparison to standard uh checking is a savings account.
Another option that I've seen also is people keeping their money within a money market account. So it does the same as a high yield savings account, but also it and also have that same liquidity aspect of being able to get your money immediately in case of unforeseen circumstances. So those are the two main things that I've seen where you can store your money at in case of any anything happening, you want that money immediately.
So the fourth thing I really want to talk about is how do you even build up your emergency fund in the first place? And I think it really just starts off by by starting small, by starting bit by bit. And it really just comes with budgeting and being able to be meticulous when it comes to that.
So what I would say is just if you were to create a budget for yourself and let's say you take off $50 per paycheck or let's say uh $100 per paycheck and put into an account, you can over time build that account up or the emergency fund up to meet that three to six months uh income that you will need.
And so really just a matter of just being diligent and working on that ever so often. It's also very important to whenever you have any unforeseen circumstance and you use and you take money out of the mer or out of that account that's supposed to be used for emergency fund is then continue to work on replenishing that money or that account back up.
So once you get to that ideal number, you don't have to put any money into it. But if you have an expense that takes money out of it, you want to make sure that you work to replenish it back up. So the last thing that I really want to talk about is when should you and when should you not use money within your emergency fund.
And so I really think it just goes back to that initial statement of unforeseen circumstances. There's many things that occur throughout your life that you just don't foresee. And like I said like if you have a job loss or if you have a repair like a home repair and that and that right I'll give another example something that happened to me where I had to use my emergency fund.
And so about a month ago, I want to say about a month and a half, give or take, I had a basement leak. It rained really bad here and rain got all in the soil and it started leaking out of my basement. And it was one of those things that I didn't know what to do.
It was one of it was the first instance where I truly didn't know how or how much it was going to cost. But I had a piece of or I had a sense of peace of mind knowing that I had money stashed away in case of these events were to happen. Because not a matter of when.
It's not a matter of if, it's a matter of when. and you don't know what it is, but you knowing that you have money set aside for those expenses truly gives you a piece of mind that you can't really put a price tag or you can't put words into that. So in inverse when not to use emergency fund is really just when it's not a necessity when it's more of a want like let's say you want to go on a vacation or you want to go travel you want to go out to a restaurant with your friends.
I wouldn't necessarily say that constitute you needing to pull money out of your emergency funds. So really let me just recap the five things I talked about in this video. One, why do you need emergency fund? Two, how much should you have in your emergency fund? Three, where should you keep the money for your emergency fund?
Four, how do you build your emergency fund? Then five, when should you and when should you not use the money within your emergency fund? I truly hope this video helped. If you have any questions, please put them in the comments. I would love to hear from you all. I guess how much would you say is sufficient for an emergency fund?
Let's get a conversation going. Thank you once again. Please like, comment, and subscribe. and I'll talk to you soon.
This video is for general educational purposes only and is not personalized investment, tax, or legal advice. Every situation is different. Talk with a qualified professional about your circumstances before acting. PLC Wealth Partners is a registered investment adviser. See our disclosures.
