There will be times unexpected costs come up. It could be a broken appliance. It could be a physical injury. The reasons are countless but one solution helps: keep some extra money to absorb the financial shock.

The first question it, how much do you need to save? Some say 3 to 6 months. Others say a minimum of ~$2500. Really it will vary according to your circumstances. If you haven’t saved anything, it can take a while to build up an emergency fund. If your income is unstable, then you may need more saved away than if you had a stable income. It can also vary depending on any debt you may have. Anything you save now can provide peace-of-mind later.

Once you have an emergency fund, don’t fall for the temptation to use it to buy some new gadget. That’s what a savings account is for. Ask yourself, is it unexpected, necessary, and urgent? If it isn’t, then don’t use your emergency fund for it.