This is some of the best financial advice I have ever received

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It has come in handy over the years.

Key points

  • Financial emergencies can arise unexpectedly.
  • Saving money for an emergency is a good idea, regardless of your age or income.

As children, we are hardwired to avoid much of our parents’ advice rather than follow it. It’s typical for children to say things like “No, I don’t need a jacket” and “No, I habit being too tired to go to school tomorrow if I stay up late watching sports.”

As a child, I was no different. In fact, my parents like to joke that one of my goals as a teenager was to do the opposite of everything they asked me to do.

I may not have always followed my parents’ advice (like not staying up until 11 p.m. to watch playoff games the night before a big exam). But one piece of advice I did following has served me well for many years. And it is especially useful in adulthood.

Save for the unexpected

My parents were never rich, far from it, but they always did the best they could with the resources they had. In addition, they made sure they always had a safety net in the form of savings. The logic was that you never knew when an unexpected bill might arise. So, from the moment I started earning money by babysitting, they encouraged me to open a savings account and put some money in it.

Over time, I managed to build up my emergency fund and turn it into a more solid sum than my teenage babysitting gigs allowed. In my twenties, I managed to accumulate enough money in the bank to cover six months of living expenses. And now I have enough money to cover about a year of expenses.

For many people, this is an excessive amount of money to keep in cash. But one of the main reasons I have a bigger emergency fund is because I’m self-employed. If I lost my job, I would have no severance pay, no unemployment – and possibly no warning. And so for me, a year’s worth of living expenses in the bank is not that common. The fact, however, is that my parents made it clear that financial emergencies could happen at any time and that it was important to be prepared for them.

Years ago, I wrecked my car in a minor accident that would have left many vehicles relatively unharmed, but it nearly caused my automobile to implode. I was able to dip into my emergency fund to pay the down payment for a new car – which I needed quickly.

And in the middle of last summer, my air conditioning system broke down. My husband and I didn’t have time to hunt for a good deal on a replacement system. Instead, we got a few quotes and went with the cheapest, which was around $7,000. If it weren’t for this emergency fund of ours, we would have had quite a large credit card balance to carry around.

listen to your parents

Even as an adult, I don’t always listen to the advice my parents give me. But I’m so glad I took their advice on emergency savings to heart. My cash reserves have bailed me out many times throughout my life. Equally important, they saved me a world of added stress during already difficult times.

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