Common Reasons to Establish and Keep an Emergency Fund
When it comes to life, there’s one thing for sure – nothing is for sure. Unemployment, illness, car repair – all of these things can occur suddenly and leave you facing financial hardship. If the unexpected happens, it’s absolutely essential that you have an emergency fund in reserve.
At the very least, you need an emergency fund that is made up of three months of your total living expenses. To determine exactly how much you should have in your emergency fund, consider using one of the free calculators that are available.
However, you may not be convinced that this emergency fund is actually necessary. Don’t worry – you aren’t the only one who has your reservations. However, some of the situations you may find yourself in that an emergency fund could be helpful with are found here.
It doesn’t matter if you have been laid off or if you have left your current job for personal reasons, your emergency fund can provide you with the safety net needed to help you pay for necessities while you aren’t working.
While there are other options to cover your expenses, having an emergency fund is extremely beneficial. If you want to ensure your fund is adequate, you can click here to visit SimplePersonalLoans for free, and see how much you can be approved for to begin this fund.
Injuries or Illnesses
Even if you currently have health insurance, it doesn’t mean that all of your care is going to be covered. In addition to protection for yourself, what happens if your pet is hit by a car or needs some type of surgery?
The fact is, veterinary care can be quite expensive – especially in an emergency situation. With an emergency fund in place, you won’t have to worry about these types of unexpected expenses.
Increases in Your Cost of Living
As the economy fluctuates and changes, it means that your bills and expenses may fluctuate, as well. If this happens, you may find it extremely challenging to make ends meet.
However, if you have put back funds in your emergency fund, you don’t have to worry about these types of issues. You will have the money that you need without having to worry.
A Sudden Move
Do you have to transfer to a new location because of your job? Is the cost of moving going to exceed what you have to spend? If so, this is another time that an emergency fund can be invaluable.
With this money stuck back, you can cover the costs of the move until you are able to get more money in the bank. Once you do, you can replenish your fund for the next move that pops up unexpectedly.
Vehicle Related Expenses
Do you rely on your vehicle to take you where you need to go day in and day out? If so, a breakdown could be devastating to your entire life and routine. Not to mention the high cost of car repair.
In some cases, the issue may be so significant that you have to replace your entire vehicle. This can put a huge strain on your finances. A much better option for you to use is the emergency fund you have created. This will reduce the stress of the situation and get you back on the road quickly.
If you don’t yet have an emergency fund, then now is the time to create one. You will be happy you did if an unexpected life event occurs and you need money right away.