You are using your credit smartly now. No more over expenditures and abuse of your credit card but instead charging only for necessities. Since your budget is well under control now is the time to put aside money for emergencies. This savings is not the same as your savings account that you use to make investments and build on for the future. This is a special savings account used for emergency usage and not to be tampered with for any reason.

You should establish this account in good times for the bad times in order to help you during any crisis. Many people view savings for an emergency in different perspectives. You can see that because of these different amounts of money is set aside. Many times people view major emergencies something that they plan on handling with their charge cards that is why they only set aside a little bit of cash. Viewing an emergency as something as simple as replacing a car tire or a visit to the emergency room will only constitute putting aside a few hundred dollars. When you view an emergency as a major car repair or fixing a leaky roof then you will want to put aside a thousand dollars or bit more.

Your credit card limit should also determine how much money that you put aside for an emergency. Your credit card has a $500 limit then you most certainly will need to put aside at least $2,000 at best. You may want to consider putting aside enough money to cover six months wages. The reason is that you should be aware of how the economy is and the job market being very scarce leads you to realize in case of a lay off you are going to need much more than a few hundred dollars in order to survive. You find that by saving as much as six months of your wages for an emergency, the additional usage of your credit card and your personal savings will be used before you know it in case of a lay-off from your job. That is why it is very advisable to maintain at least two credit cards along with your emergency funds.

You will find that credit cards are very useful in times of emergency if used wisely. You can find credit cards that offer 0% interest and no fee's unless you actually use the card. You should use the card occasionally in order to keep it active but make sure you pay the bill in the same month. This will keep your credit score high and it will add to your capability of getting credit when you need it the most. You can depend on your credit in case of an emergency but make sure that you also have saved money along with the credit card.

Remember that in the long run you're going to have to pay this credit back so it's always important that you don't have to spend over your head and truly use it for emergencies only.