The Emergency Fund

Aside from saving for the long-term future, you should also put some money aside for anything unexpected that might crop up in your immediate future. This is money specifically reserved for that proverbial rainy day when you need roof repairs on your house, or you lose your job. How much you want to put aside is up to you, but most people agree that about 3 months expenditure is the bare minimum you should have for an emergency fund. Some people however, might want to save a bit more, particularly if they work in industries where there is not such a high turnover of jobs and it takes longer to look for work.

Once this emergency fund is in place and you have sorted out your budget and trimmed your outgoings, you will then be free to save money towards your early retirement!