Life is always unpredictable; many times, life does not go as we have planned it. We don’t know when life will take an unexpected turn. So, you have to make yourself prepare for the worst time when you need an emergency fund.
No matters how financially secure you are life has a way of throwing unexpected curve balls that you never expect. Experts suggest that one should have at least 6 months of salary in their saving account or any other kind of investment which one can easily get at the time of emergency.
There could be many reasons why one should emergency funds. Few of them are listed below.
There may be time when you could lose your job unexpectedly and it is taking time to get another. Your emergency fund will help you in your daily living expenses and paying bills. If you don’t have any emergency fund then you have to take the job offer which you are not comfortable or which is paying you less as compare to your previous one.
Sometimes there could be medical emergencies or a major accident. Many people think that they are young and healthy and they could not have any medical emergency but life is unexpected and anything can happen so we need to get prepare.
Home repairs are not cheap. Sometimes there may be a balcony or a bathroom which need renovation. It takes lots of money and an extra saving will help you. There are home insurances for home repair but not everything is covered under that.
Not every surprise is pleasant. Guess, one morning you started your car and it does not start. So now your car needs a repair and this surprise is not pleasant at all. If you have emergency fund then you can afford a rental car till the time your car gets repair.
You (or your partner) Unexpectedly Get Pregnant
It happens, and an unplanned pregnancy can give you nightmare as you are not financially ready. A baby can drain out your savings. So emergency fund can help you to prepare for your new baby.
Child Needs Urgent Medical Help
Although you may have a health insurance but still you need to spend on the bill form your pocket until you get your deductible.
Unexpected Tax Bill
There could be a surprise unexpected expense which can drain your savings. You can apply for refund but it will take time and if you don’t have emergency funds then you could be in a miserable state.
A sudden death of your relative or loved one can force you to buy the expensive last-minute ticket of the plane for funeral. If you have an emergency fund then you do not need to depend on your credit card as it will be rack up high interest.
So if you did not think about emergency fund then think about it now.