How to build your financial cushion

Don't let unforeseen events change your financial plan or ruin your day

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22.Dec.2021

The first step toward financial peace of mind is making sure that you can cope with unexpected expenses without disrupting your overall financial plan. It all starts with your emergency fund:

¿What is an emergency fund?

It’s money saved for unexpected expenses, such as having to replace an appliance.

What is it for?

In order not to go into debt or alter your savings plan due to unplanned expenses. This way you can have peace of mind.

How much money should you put in?

3 to 6 months of your fixed expenses. From there, put in the amount you feel confident with.

How to build your emergency fund

Step 1. Calculate what your monthly fixed expenses are. You can make a personal budget to find out.
Step 2. Multiply that number by 3 and by 6. This way you will know what your goal is.
Step 3. Calculate how long it will take to achieve your goal with your current savings. Save at least 5 % of your salary.

Remember: the more you save, the sooner you will reach your goal.

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