Frich Reveals: Emergencies🚨
One of the main reasons we want to get you thinking (and talking) about money early on, is that we want you to be financially ready for an emergency.
Unfortunate situations that are out of our control can set us up for failure early on so we want to make sure you're ready to tackle these - at least financially. There's nothing worse than dealing with an emergency while also worrying about its long-term effect on your financial wellbeing.
So let's dive into one of the building blocks of financial wellbeing - emergency funds!
‍
Do you have an emergency fund?
53% of Frichies said yes. We salute you!
For the rest of you - consider making this a major priority for yourself in 2025. Truest us. Having an emergency fund truly is one of the most important financial building blocks for you to feel secure.
If you find yourself in a situation where you need to cover unexpected financial hits with a credit card or a quick loan, you'll end up spending way more than if you saved up that money upfront. And here's a bonus - if you keep your emergency fund in a HYSA (high yield savings account), you will actually earn money for not spending it!
‍
Have you ever maxed out your credit card?
Speaking of... Maxing out your credit card is truly one of the more expensive financial mistakes you can make because credit cards are basically very expensive loans (meaning they charge very high interest rate on unpaid balances). Rule of thumb - you should strive to never charge more on your credit card than you can afford to pay back at the end of each month.
As for Frichies - 44% of Frichies have, at one point in their lives, maxed out their credit cards. Our advice? If you have any unpaid balance on your credit card, add that to your Top 2 Goals for 2025 (alongside having an emergency fund).
‍
How much money do you have in your emergency fund right now?
Frichies answered an average of $6.82K.
Rule of thumb - you should have approximately 3 months of bare bones expenses in your emergency fund. Think - rent, bills, food, transportation.
However, depending on your risk tolerance, you can move that goal up or down ranging from 2-6 months. For example, if you're a freelancer, you should probably strive for a larger emergency fund, since your employment type is a bit more volatile than the traditional 9-5. But if you're working in a very stable job, your emergency fund can be closer to 2 months of bare necessities.
