Your Get out of jail account | GOOJ
What would you do if you needed to get out of jail?
Have you got the funds to get you out of trouble? And I’m not talking about a credit card that you can max out to pay for it and then get eaten up by interest rates!
I’m talking about an emergency fund, or Get Out Of Jail account, that gets you out of short term trouble any time something unexpected comes up. You shouldn’t touch this account for any other reason and once the funds have been withdrawn, you should fill it back up.
A good amount to save up is three months’ worth of income. There are different reasons for the three month period, but the main one would be to cover your cost of living in case you are unable to work. Most Income Protection insurance cover have a three month waiting period.
How would you pay your mortgage repayments or your rent if you don’t have the buffer?
Having Income Protection is a complete different conversation to have, along with any other insurance cover. For now, let’s stick to your Get Out Of Jail account.
A few years ago I was facing the break-up with my husband. Even though this usually is something that you can foresee, you don’t really know what or when things happen. Let alone how to prepare for it. Women generally have a much harder time financially in these circumstances. I wish I’d had a Get Out Of Jail account.
I was facing not only a sudden move, but also increased cost of living and funding a bond, the first month of rent and furnishing the new place as well. This easily adds up to a couple of thousand dollars on top of the emotional state you are in. I personally was very anxious about the future and how I would cope financially in this situation. Having a buffer in the bank makes this less stressful and you are able to focus on yourself.
So, are you able to get out of jail?