It is important to be prepared for the unexpected. This one of the reasons it is important to have an emergency fund in place. No one plans on having their car break down or that scare with cancer where the tests run iwell over a thousand dollars. No one plans to lose their job or for the furnace to go out. All of these things cost money. You should plan for emergencies by saving at least one thousand dollars until you are out of debt. After that you should save three to six months of salary to cover other unexpected expenses. This money is not used for anything but true emergencies.

You should also be planning and paying for regular maintenance of your home and car. You know that you will eventually need to replace your roof and your appliances. You can save for this in a sinking fund. This money that you set aside each month to cover the bigger expenses that you know are coming. You should also pay for the regular upkeep and maintenance on your car. It is important to guard against emergencies by properly caring for your things.