There is always emergencies. You might as well plan for them. Going into debt or having a credit card handy “for emergencies” is not prudent planning. There are simple emergencies like car trouble or replacing your broken computer (that you need to work), and then there are the really big ones like job loss.
I like the Dave Ramsey philosophy of first getting a $1000 emergency fund built, for simple emergencies. Then later work towards 3-6 months of income.
I have my own kids set up emergency funds of their own. My youngest started with $20 that was put away in a separate envelope. My older son built that to $100 by his 12th birthday, and every year adds $100. He’s 15 now so he has a $500 emergency fund.
What’s an emergency for a 15 year old? He had a hard drive failure on his laptop and needed a replacement. Typical emergencies for teenagers could also be replacing a lost cell phone, or even last second concert tickets that they must go to. It’s their money, so they can take from it rather than asking to borrow it. The only catch is that emergency fund must be replenished before regular spending resumes.
I’m proud of my kids for learning these lessons of self reliance. There is no “parental ATM” in our house. They set savings goals and work towards them and no money is just given to them because they asked for it. There is no such thing as debt or loans in our house.
Same goes for me. Some years ago, my father was commenting about how he didn’t understand the different businesses I’ve done, but he said “All I know is you’ve never come to me for money”. At that moment I realized what a victory that was.
Plan for your own emergencies.
