If you find yourself struggling to get by, then chances are you could have benefited from creating an emergency fund for yourself. An emergency fund is there to cover your expenses during difficult times and ensure that you and your family have what you need. What’s more, this fund means you have liquid assets to pay for everything from rent to groceries if you should find yourself in a bind.
Financial experts recommend having at least several months of your salary stashed away— however, this isn’t always easy for everyone’s budgets. If you can manage to have even just $1,000 set aside, you can rest assured that you have enough to carry you through difficult times. Here are some of the most important reasons you might need to tap into your emergency fund.
Natural Disasters
Life can be unpredictable, to say the least. Mother Nature is no exception. Regardless of how much you might try to protect yourself from all sorts of unforeseen circumstances, nature has a way of getting the best of us every time. In the event of a natural disaster, you could find yourself in all sorts of unpleasant situations. Your home could be hit by a flood, you may find yourself on the street, and you may even find yourself significantly injured. An emergency fund is there to ensure that even if Mother Nature strikes, you have everything you need to cover your bases.
Having cash put aside means that you know that even in the event of a storm or earthquake, you’ll be covered to buy whatever you need.
Job Loss
Regardless of how secure you feel in your job, the truth is that you never know when you could get laid off or your company could go under. Many people find themselves thriving one day and jobless the next. The only way you can ensure that you’ll be able to take care of your family is by having money on hand.
An emergency fund is there to provide a safety net so you can continue paying your bills even when your paycheck stops. While many people make the mistake of relying on credit cards to help carry them through tough financial times, this will only lead to significant debt and high-interest loans.
Car Troubles
Regardless of what kind of car you own, there’s always something that can go wrong when you least expect it. Having money on hand to cover any car repairs is incredibly important, especially if you rely on your car to get to work every day.
Rarely are car-related repairs less than a few hundred dollars, so it’s important to know that you have the money to cover these repairs should you need them. Finding yourself carless couldn’t just affect your work, but could also affect your ability to do things like go grocery shopping or take your kids to school and their other activities.
Peace of Mind
These are just a few of the most common reasons why people often need to tap into their emergency fund. The truth is that you never know when anything could happen that we never even anticipated. Having the peace of mind knowing that you have extra funds on hand can help you live a more peaceful and balanced life knowing you’re covered.
