Double Your Emergency Fund If You Plan to Work on Your Own
Self-employment can be volatile, especially when you’re just starting out. You are not sure when the next client will come or how long the concert will last. For this reason, one financial planner suggests doubling the amount of your emergency fund.
Consumer Reports explains:
Tom O’Connell, President of the International Finance Advisory Group in Parsippany, NJ, encourages his self-employed clients to strive to establish an emergency savings fund that can cover living expenses for at least 6-12 months as additional protection in case they run out. spell and have no income. That’s double what he recommends to clients whose work brings sustainable benefits. “The worst thing you can do is spend money on retirement savings or college savings because you don’t have a big enough reserve pool,” he says.
Experts are everywhere talking about how much your emergency fund should actually be . Some say six months of spending is overkill. Some even say that three months is too much – better invest your savings instead. Whatever number and store of value is right for you, the idea is the same: double it up if you’re self-employed. This helps to compensate for the instability that often arises from self-employment. For more details please follow the link below.
5 Steps To Take If You Are Planning To Be Self-Employed | Consumer reports