Emergency Fund: Top 5 Reasons Why You Should Save for a Rainy Day
If you don’t already have one, then you probably often hear from people around you that you need an emergency fund. What is an emergency fund anyway? An emergency fund can simply be thought of as a safety net or a sum of money that is readily accessible to you in the event of a financial mishap or emergency.
Many people dismiss emergency funds because they often think, “A financial crisis won’t happen to me.” The reality is that crises can and do happen, and it’s imperative that you are prepared for them.
These are the Top 5 Reasons Why You Should Start an Emergency Fund Today:
You Could Lose Your Job –
It doesn’t matter how secure you are in your position at work; anything is possible when it comes to your employment. It’s a good idea to have an amount of money saved to cover at least 3-6 months of bills and other expenses. This provides you time to straighten out the situation and find another source of income before your emergency fund runs out.
A Serious Health Condition Could Creep Up –
How are you going to finance a random and unexpected trip to the emergency room, should it arise? It’s impossible to know when your health will take a downward turn, and that’s why it’s imperative that you start building your emergency fund as soon as possible.
An Expensive Home Repair Could Pop Up –
Who’s to say your air conditioner won’t break down on a day when the heat has soared into the triple digits? Unexpected home repairs might not worry you too much if you already have home insurance, but don’t be fooled. Home insurance probably won’t cover 100% of the possible things that could go wrong in your home.
Your Car Could Clunk Out –
You probably take your vehicle for granted if it seemingly never malfunctions, but for every extra mile that is put on a vehicle, the chance for car trouble to pop up rises little by little. In some cases, car repairs can be as cheap as $50, while other repairs can require thousands of dollars. Will you be prepared if your car malfunctions when you need it most?
You Could Have to Unexpectedly Travel –
Lastly, unexpected travel won’t pay for itself if you find yourself needing to suddenly go out of town. Maybe it’s for a funeral or the birth of a grandchild. Sometimes these types of things can pop up and they can cost a small fortune! Avoid putting these types of expenses on credit cards by starting your emergency fund now!