12 Reasons Why You Need an Emergency Fund
We live in world that is grossly focused on consumerism, and although it is nice to get instate gratification, there comes a point of time when things can start going pear-shaped. Constantly spending and spending may be enjoyable, but it is important t be prepared. And no matter how prepared you may be, it is beneficial to have an emergency fund to fall back on. You can set up an emergency fund once you pay off all your debts, if you have any. Your emergency fund should be able to cover anywhere between 3-6 months of expenses. This may seem like a lot, but you really never know what’s around the corner. And just incase you think you don’t need one and have everything covered, you can 12 top reasons to have an emergency fund listed below: And just in case you are sitting there thinking you have it all covered, here are 12 unexpected reasons to have an emergency fund.
1. You Lose Your Job
There is no such thing as a job for life. Unless you are extremely sought after, you can be left without a new job for as long as some months. That’s why it is important to have an emergency backup to fall back on incase you are left unemployed.
2. Your Hours Are Cut
Your employer may cut your hours and if this happens you’re left with a decrease in your salary. What would you do if this happened? Would you be able to pay the bills?
3. You Get Promoted
It is definitely good news, but what if the job required you to relocate to another city or state? Would you be able to accept it if you did not have the funds already to cover moving costs?
4. You Receive A Tax Bill
Hopefully this won’t happen to you, but if the tax authorities make a demand, it’s better to have the cash ready as soon as possible.
5. Your Car Breaks Down
Cars have a bad habit of breaking down just when you cannot afford the repairs. If you drive an old car, it is important to be prepared with an emergency fund so you can fix it as soon as possible.
6. You Need A New Car
If your old car can’t be repaired then you may have to buy a new one. However, cars are not cheap, and if it is cheap, it may not last long. You’ll be able to buy your new car in a more affordable way if you already have a fund for it.
7. Your Dog Gets Run Over
This is one of the worst things that can happen, but if it does, the vet bill will be exorbitant. Be prepared. These things happen when you least expect it.
8. An Unexpected Utility Bill
Even if you pay the bills by monthly, that doesn’t mean you won’t receive an extra bill at the end of the year. If the meter is read again, you may be asked to cough up some more money. Having some money safely kept in a savings account makes a big difference.
9. You Get Sick
Taking a few days off work because of the flu won’t hurt, but a few months off on longer term sick leave could be a disaster.
10. Your Child Needs Orthodontist Treatment
If you pay for this treatment privately, it can be quite pricey. You may not be able to get the entire treatment covered by your insurance provider.
11. A Friend Needs Your Help
Your best friend may land up on your doorstep looking for a place to stay. You may need to support them until they can get back on their feet.
12. Your Landlord Increases the Rent
Living in rental accommodation is just one of many to have an disaster fund on standby.
Leave us a comment below if you can think of any other reasons to have an emergency fund on standby!