Get an emergency fund.

Its a no brainer right? The best way to protect yourself from financial misfortunes is to save for a rainy day! You’ve heard the proverb about the ant or something building up his stock for the harsh winter (okay I know I have the story ALL wrong but you get the gist)

The rule of thumb is that you should have 6 months of living expenses saved up to be at your disposable when disaster strikes. And what I mean by living expenses, I mean the utmost necessities such as rent, transportation, utilities, insurance, food…things that you need to keep going. If you can't bare to spare that much, the most moderate level of savings should be 3 months, but nothing less!!

So you say, “My savings account interest rate sucks!”

Well, I say, “Get a money market fund.”

Why, you ask?

Well, I say, "It’s the next best liquid version of cash". You get a better savings rate and you still get the convenience of withdrawing your money when the need arises without penalties. That’s key.

Where are these mutual fund thingies give that high returns, you ask?

Well, I say, "I’ll tell you what I’ve been told: Try the TIAA-CREF Money Market Fund and Vanguard Prime Money Market Fund. Just Google it for more info.

But if you're not up on the money market because you dont have the minimum balance to open one, the next best thing is to open an ONLINE savings account. They give out higher rates than brick and mortar banks, so shop around and find one that suits your fancy.

Good luck!!

Source: (CNNMoney, my brain)

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Labels: finance