In this day and age, with life becoming pretty expensive and professional wages not seeming to increase accordingly, many people literally live month to month.
Being flat out broke a day or two before your paycheck comes in is NOT a fun way to live. Some people may argue “YOLO??”, but not me!
I don’t want that stress in my life. Especially if something goes wrong or an unexpected expense pops up. This can and does happen so easy. Trust me.
You will be in serious trouble!
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Begin To Build An Emergency Fund
If you haven’t done so yet, then I think it’s important to begin to build an emergency fund.
It will put your mind at ease knowing you have a small safety net to fall back onto if something goes wrong, or if you desperately need a bit of disposable cash.
What exactly is an emergency fund, you may ask?
Well, it’s just a bit of money put away in a bank account to be used in, you guessed it, an emergency situation!
Things happen unexpectedly which require a bit of cash, and having funds put away for such exact things really does take a lot of stress away from you.
An emergency fund, however, does NOT always have to be for emergencies only!
No no, it could also be used for more pro active things. Continue reading and you will see why and how!
So below are FIVE reasons everyone should have an emergency fund.
#1 Loss Of Job Or A Sudden Stop Of Income
It can easily happen that one day you are happily employed, and the next you have been told that your time is up at your current job.
This does suck, and having some saved up emergency cash can help you during this period whilst you search for new employment, or come up with a plan of earning money.
It gives you a bit of breathing space, which is extremely helpful.
#2 Stuff Breaks
If you own a car then you know what I mean!
Even if we have insurance etc (many people don’t), if we bump our car or our car breaks down for whatever reason, it’s going to cost us something.
So many of us are reliant on our cars to be able to do almost everything in a normal, working day. So this is an expense which we would have to incur, unfortunately.
#3 You Get Hurt & Need To Go To Hospital
Having an unexpected emergency is horrible. Even worse, though, is not being able to pay for it!
Emergency funds can help a lot when you need them, especially for medical reasons.
#4 If You Dream Of Travelling, Then You Can Do It!
OK, so this isn’t really an emergency! Or maybe it is?!
But if you really have a dream of going on a long trip somewhere or just need to get away for a bit, but you find you NEVER have enough money to book the trip, then start a fund.
Money spent on travel is well worth it!
#5 If You Want To Start Your Own Thing
Sick of being an employee and doing exactly what your boss says? Then maybe you want to start your own business!
Unfortunately, you need a bit of financial breathing space to be able to do this.
Having an emergency fund can help with this, as it buys you time.
So start that fund right now, and hopefully you will get to a point where you can walk out of your job and into a potentially self-employed life!
Ideally you would want to have at least six months worth of expenses saved up, and always aim to keep it like that.
If you can manage the above, then you have created a real good safety net for yourself, and your mind will be at ease!