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The savings account: what it's for, what I've learned about it, how to get it into your money system

I made a mistake with my savings account.

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Most expert advice will direct you toward saving up some cash for unexpected expenses. Usually a minimum of 3 months worth of expenses according to your current lifestyle. Some suggest upwards of a year or more depending on your situation (job security, season of life, risk tolerance, etc.).

Often this cash reserve is called your “emergency fund.”

It’s cash set aside as a buffer when life happens. It’s specifically meant to live in an account that’s accessible. It’s arguably the most pivotal factor in your pursuit of financial freedom. But why is it so important?

If you can save enough money to cover expenses you weren’t planning for without having to interrupt investing, or even worse, going into major debt, you have developed a shield protecting your wealth-building process.

When you don’t have this fund available, more detrimental alternatives have to surface keeping you stuck in a backward cycle.

I have made this kind of mistake, so learn from my experience. There’s more than one way to misuse your emergency fund, and I found one of those ways.

Life happened, and I wasn’t ready for it. At least in the way I should have been.

Here’s what happened…