You might hear financial advisors talking about emergency savings, sometimes referred to as a “rainy day fund”. This is money that you have safely tucked away in a bank that can be used as soon as you need it, for surprise expenses – health emergency, car repairs, etc.
Unfortunately, for too many people in the US, such funds do not exist. Don’t let yourself fall into that category of people that are one $400 expense away from bankruptcy.
You can start your own emergency fund with this year’s tax refund. The average tax refund this year, according to a recent survey, is just under $2,000. But no matter how much you got back, if you don’t have a rainy day fund right now, you should use your refund to start one.
For more, read this article from The Simple Dollar.