We live in an unpredictable world, and anything can happen from one minute to the next. As we saw with the Coronavirus, one minute everything was normal and the next minute many of us were struggling to make ends meet.
Having a dedicated pool of money set aside for unexpected scenarios is critical if you hope to weather the hard times. Whether you need to call a plumber, you have a medical emergency or you lose your job, emergency funds are there to make sure you’ll be okay.
Here are some compelling reasons why you should always have a little money set aside for emergencies.
Medical Costs
Health issues can come up all of a sudden without any warning. Even with insurance, your medical bills can still cost you quite a bit out of pocket. From co payments to deductibles, healthcare expenses can create an extreme financial burden if you’re not prepared enough.
Even the slightest injury can cause time missed off of work, which can also be detrimental for your finances. And an emergency fund is there as a buffer to cover any medical bills and time lost from work. That way, you can focus on your recovery without the added stress of building up debt. This financial cushion is critical especially if you have a family to look after.
Income Loss
In today’s economy, you just never know when you could potentially get laid off or even fired. Even freelance jobs can suddenly take a turn for the worst overnight, so having money set aside to cover your wages in the event of a lack of income is crucial. Most financial experts recommend having at least three months of income set aside to make sure you can pay your rent and other basic costs.
That way, you won’t be rushed to find a job simply for the sake of having a job, but rather take the time to find something that is truly a good fit for you and brings you satisfaction in addition to financial security.
Car Repairs
Those people with cars know that repairs can be quite spendy. If your car even has the slightest problem, you could find yourself in over your head for hundreds of dollars. That’s why it’s important that you have a little money set aside to cover any car-related expenses. This is particularly important if you have to commute to your job every day.
The last thing you want is to have to lose your job just because you didn’t have enough money to cover your car repairs. While buses or carpooling is sometimes an option, it’s not always one. That’s why relying on your own set of wheels is critical.
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