Everyone knows how important savings are, but few of us think about the consequences of not having money saved for emergencies. Here’s how these funds can save you in dire circumstances where you need money.
Loss of a Job
You need to have at least several months of emergency money on hand. You never know when something may happen to you. For example, with the economy being in rough shape, you could lose your job. If you don’t have enough cash on hand you won’t be able to pay your mortgage or rental payments and you could lose the place that you live at. Having emergency money on hand in case of job loss just makes sense.
Personal or Family Health Issues
You may get insurance from work for medical costs, but this usually doesn’t cover everything. A serious illness or an injury can occur randomly and if you’re not prepared for this with emergency funds to cover expenses you’re going to have large bills you cannot pay for. You should have emergency money for unexpected medical expenses
Unemployment Benefits Don’t Last Forever
If you lose a job you can always claim unemployment benefits, but these never last a long time. If you’re unable to find work, you need access to emergency money. If you haven’t saved for this, then you’re not going to have money to meet expenses.
You may have house insurance which covers your belongings, but if you are in a flood, tornado or other event, you’re going to need access to extra money to get you through rough days. You may need to live in a shelter or a hotel and you’ll need to pick up items for day to day as everything you need is rarely supplied to you. This money would be needed to help you get back on your feet again after the cleanup.
Your Job Can Help You Save
Many jobs have savings programs that can help you put some of your money away for you. If your job offers them, then take advantage and save some of your money for emergency expenses. If your job doesn’t offer this, open an account where you put money for the sole purpose of emergencies. Keep this separate for your savings as you’ll draw from the savings more often. The emergency money isn’t to be touched unless it’s absolutely necessary.
Put Money Away Each Month Starting Now
Each month you need to add money into your emergency fund. It can be as little as $10 or $20, as this money will add up over time. The main thing is to start an emergency savings because if you don’t have one you’re putting yourself at risk for unseen events which are out of our control. By having emergency money you’re going to be prepared for these events and you’ll be able to meet the expenses that these events require. Start an emergency fund today and be prepared for tomorrow.