Here a few tips on setting up this fund:
- Make sure that you have easy access to the cash. If you keep it in a high yielding online money market account, be sure that you are able to access it readily. Keep in mind that you might need this money in the event of an environmental disaster (Katrina), so you need to understand how you might be able to access the cash without internet access or electricity.
- If you are lucky enough to have saved some money, then set aside some now to establish this fund. If not, then consider using your tax refund. Other ways to fund the account would be through the sale of things that you have but don't use anymore.
- Find an account with a good yield, but don't let the rate be your only driver; remember that you need easy access to the funds.
- Fund the account with an automatic savings plan
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