Everyone Needs a Small Emergency Fund

emergency-fund

Emergency Fund

Build a Small Emergency Fund

Hopefully you have made a wise decision about where to teach and have gotten settled there. Now, it is time to build a small emergency fund. Ideally, you would have done this before you moved because it is always good to have a plane ticket and a couple months’ expenses socked away in case things go bad with your new country or place of employment.

However, if you do not have this, it is time to save up your first $2,000, which you will hopefully be able to do within the first two or three months of teaching abroad. I chose $2,000 because for $1,000, you should be able to get a plane ticket home or to another destination and then you will have another $1,000 to tide you over until you find work of some sort. I recommend keeping the money in a place that is easily accessible and by easily accessible, I mean available immediately in case of emergency, preferably in a separate bank account in your adopted country. Keeping it in your home country, but easily accessible with a debit or credit card is a good option too. Do not worry about earning lots of interest on this money because that is not its purpose.

You should maintain this small emergency fund at all times until you have paid off all your debts and then you will build your full emergency fund of 3-6 months of living expenses. If you must dip into it your emergency fund for some reason, replace it as soon as possible and by as soon as possible, I mean your next paycheck.

Reasons to dip into it would include emergency medical or dental care, or needing to go back home in case of a family member’s illness or death. This does not include things like: going on vacation, buying food, drinks, home furnishings, replacing a broken computer or cell-phone, and everyday medical and dental expenses for yourself or your pets.

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