Are you familiar with contingency fund? Contingency fund is sometimes called emergency fund. Contingency fund is the money that you keep for any emergency that will happen in your life. There will be times that you will need money so badly. You’ll be very grateful if you have contingency fund because you will have no problem in looking for money when you need it.
I always save at least 8% of my income for my contingency fund. I never withdraw it from the bank. I don’t call it my savings. I call it my emergency fund. Whenever I receive my paycheck, I never forget to allot a share for my contingency fund. It’s very important if you want to get rich. Some people have fear of losing their money. And that fear of losing money is the very big obstacle in achieving your financial goal. If you have contingency fund, your fear of losing money will be eliminated.
The money left after deducting the contingency fund from my paycheck is the money that I will use for my expenses. I also used the money left to save, invest, and give money to church or charities. I always bear in mind that my contingency fund will never be a part of my savings or part of the money that I use in investing. Contingency fund is like a best friend of mine who could let me borrow money when I need money. If I borrow money from my best friend contingency fund, I will pay it immediately as soon as I earned money from my business, work, or other source of income.
Hope you will start to have a best friend now who could let you borrow money when you need money. I mean, start to have a contingency fund.