Consumers need to understand the difference of an emergency fund from a reserve fund.
Philadelphia, PA (PRWEB) September 06, 2015
Debt Consolidation USA shared in a recently published article how consumers can efficiently build up their reserve funds. The article titled “Ways To Build Up Your Reserve Funds” highlights the importance of having these reserve funds and shares some tips in making sure that people are able to save the amount that they need for emergencies.
Reserve funds are made up of an emergency fund and a rainy day fund and each has their own specific purpose. But combined, they are used to address unforeseen financial emergencies in the future. They are the consumer’s best line of defense against money problems in the future.
The article shares that one of the first things consumers need to do is to be able to understand the difference of an emergency fund from a reserve fund and how to use each of them. The rainy day fund is meant to cover the small unexpected financial emergencies like a busted pipe or a broken light.
The emergency fund is for the more serious needs and would need to be bigger than the rainy day fund. This is used to cover the budget in the event that a person loses their job or even to cover some serious medical needs. This is usually measured with the number of months it can cover for the expenses.
The article also shares that as consumers try to build up their reserve funds, they need to plug up their spendings. They need to make sure that they monitor their spending and not waste their money on useless purchases. They also need to take a closer look at their budget to see how they can allocate more funds to go to their reserves.
To read the full article, click this link: http://www.debtconsolidationusa.com/personal-finance/5-ways-to-build-up-your-reserve-funds.html