Emergency reserve: how much to save and where to leave the money
The emergency reserve is a value to cover future needs and unforeseen events, and the ideal is to save between three and six months of your monthly living expenses, at least. The money can be left in fixed income investments with daily liquidity and low risk, or in savings.
It is a way of preventing financial problems by always having an amount saved for times of need, and is recommended for everyone, whether investors or not.
Having an emergency fund starts with financial organization
Organizing your finances and, if necessary, getting out of the red, are the first steps to starting your emergency fund.
- Calculate your cost of living: add fixed and essential expenses during the month, such as rent, supermarket, energy and transport;
- Multiply by the months of reserve: the ideal is to have between 3 and 6 months of living costs in the case of salaried employees, and 6 to 12 months if you are a freelancer, self-employed person or businessman;
- Set a monthly goal: it is important to pay yourself first at the beginning of each month, without waiting to see if there is anything left over. Living a little below your income standard of living is one of the tips for saving money;
- Choose where to store your money: you need to leave the reserve in a safe place that has an income that at least covers inflation.
To know where to keep your money, find out about options with high liquidity
No matter how much money you can save every month, what matters when deciding where to leave your emergency reserve money is security and daily liquidity - the ability to redeem an investment at any time. The most common options tend to be:
- Selic Treasury: it is considered one of the safest investments on the market, as it is guaranteed by the government. Furthermore, it follows the economy's basic interest rate, which guarantees protection against inflation.
- CDB Meu Porquinho: some financial institutions offer alternatives considered safe that are more profitable than savings. In the case of Inter, the digital piggy bank has no fees and can yield up to 100% of the CDI.
- Savings: the most popular investment among Brazilians also has daily liquidity. However, its profitability is limited.
- Time Deposit: is a fixed income investment modality in dollars offered by Inter, which works in a similar way to Brazilian Bank Deposit Certificates (CDBs), but linked to the US interest rate.
- 24h Redemption Fund: allows investors to redeem their resources immediately, even outside business hours and business days.
Financial gains require reviewing planning every month
To ensure that financial returns are constant and that your planning is working, you need to review your strategy every month. To this end, monitoring the growth of the emergency reserve and continuing to save even when the minimum is reached is part of the process.
Setting goals to save, such as a percentage of your monthly income, using financial management tools and achieving extra earnings from time to time are other factors that strengthen your financial health.
Source: CNN