emergency funds just make sense!
If you’re a person that’s ever experienced an unexpected cost that really put you in a bind, you know that having an extra $500 or $5000 could’ve helped. That is the purpose of having an Emergency Fund. Experts recommend saving 3 to 6 months worth of you living expenses. So if every month you spend $2000, then you should have $6000 saved in your emergency fund.
Not only does it just make sense, but here are a few examples to show you how beneficial it can be to have an emergency fund:
1. Self-Employed or Contractor
In the scenario that there may be slower months in your industry or your contract could be coming to an end soon; having an emergency fund will be important during this time of less or no income. As well, being self-employed can come with all sorts of problems. Having contingency funds built-in for slow months, refunds, and other costly incidents can be the difference between having to close down your business and being able to withstand the storm.
2. Paying Off Debt
Emergency funds are designed to alleviate stress during the moments when your roof springs a leak, your oven breaks or you get a flat tire. Also, if you have debt that needs to be paid off (to assist that credit) and other things, having a cushion of funds would come in handy. And don’t even get me started on Medical and Dental Expenses.
3. New To Budgeting
Budgeting can be a complex task when you new to seriously budgeting. It’s common to inadvertently leave out things when we first set up our budgets. Having an “emergency fund” could pay off some debt reduce your monthly expenses and enable you to stay within budget. If you know, you know that your spending habits can make or break your financial future and creating boundaries starts with a budget.
4. Home-Owner
Being a homeowner means there is no maintenance man that you can call for free to fix your appliance. You will have to pay for all the necessary repairs and maintenance such as: lawn services, security, roof leaks, plumbing, renovations, AC Unit, dishwasher, floods (gasp for air), it has the potential to be expensive. Save yourself the headache and save yourself some money. As well, if you’ve ever lived in a neighborhood that was HOA regulated then you know that you are required to maintain your property a certain way or it comes with a hefty fine.
5. Family Lives Out of State
There is nothing worse than needing to travel last minute and not being able to because day of flights are $600 one way! If your family or friends live states away, it would be good to have a funds on hand to be able to get to them when you need to. I can remember missing funerals, birthdays and moments due to “not having the extra to spend..”
6. Kids, Pets and Dependents
Doctors appointments, braces, broken bones, vet shots, medication, babysitters and FOOD. I feel like this is all I need to say for this one. Expenses outside of what you create… be prepared.
It’s challenging being so responsible, I know. We ideally want to deal with the curve balls life throws us and move on with a smile. This is why EMERGENCY FUNDS ARE SO IMPORTANT!
Can you remember a time when you could’ve used an Emergency Fund? Comment below!