Emergency funds

The best way to prepare for a unexpected problems is to have an emergency fund available. Face it: shit happens. It happens to everyone and it'll happen to you. Accept that fact and plan on it happening.

When you begin building an emergency fund, start with having saving large enough to cover all your expenses for a month. Over time, build this up to cover at least three months expenses. These funds have to be readily available i.e. cash. Don't have it invested in stocks or CDs which will require time to cash in and receive a check.

So what are some possible emergencies? Getting laid off from your job. Having a car accident and ending up in the hospital for a time and require surgery or recuperation time before you can go back to work. There are dozens of other possible events that can require using the emergency funds.