Life is full of unpredictable situations. Unfortunately, many of life’s unforeseen events cost money. From emergency health issues to unanticipated travel obligations, you never know what will come your way.
This is why it’s so important to set up an emergency fund. Being prepared with an extra set of funds will save you from a whole array of financial problems in the future. Here are 8 good reasons why you should set up an emergency fund:
*This is a guest post. You can read more about the author at the bottom of this article.
To Prepare for Unexpected Expenses
At any time, you could be forced to pay an array of unexpected expenses. From home repairs and car repairs to emergency pet care, there’s a whole list of expenses that could pop up.
This is what an emergency fund is for. Having extra funds set aside will come in handy when these unforeseen events do arise.
To Save You from Debt
It feels impossible to get out of debt when new expenses unexpectedly pop up.
But if you have an emergency fund ready to pay off those urgent expenses, you will have more money left to pay off your debt. You won’t be forced to borrow money as often or take money out of your savings account.
Peace of Mind
We all stress about our finances on a daily basis.
The anxiety of not having enough money can definitely take a toll on your emotional well-being.
While an emergency fund won’t cure all your money problems, it can definitely take some of the anxiety away. Just knowing that you’ve got the money to cover unanticipated costs will take a huge weight off your shoulders. You’ll have peace of mind knowing that if things go wrong, you have a plan.
Emergency Health Situations
An unforeseen medical emergency could take a huge hit to your bank balance.
Your health insurance may not cover certain types of medical issues. An emergency fund will help you cover these costs and put your mind at ease during this stressful period.
If you Lose Your Job
In the event that you lose your only source of income, an emergency fund will be a lifesaver.
The unemployment period will be much more stressful if you haven’t got enough money to last. You never know how long it will take to get your next job, so you should always be prepared for the worst.
To Meet Your Financial Goals
Do you have a financial goal that you’re working towards?
Perhaps you’re trying to save enough money to buy a new laptop, a new car or even your first home.
Having an emergency fund ready will help you stay on track to meet your goals. When emergency financial situations arise, you won’t be forced to dip into your savings account.
You can continue saving for your dream home and use your emergency fund when needed.
To Help with Tax Issues
Sometimes your tax bill is not what you expected, which can be incredibly stressful.
Last Minute Travel
Do you live far from family?
In the event of a medical emergency or an unexpected death in the family, you’ll need to have enough money to fly home. You don’t want to be in a situation where you can’t make it to a funeral due to lack of funds.
Booking flights at the last minute can be extra pricey, so it’s good to be prepared ahead of time.
Once you start building your emergency fund, you will be thankful that you did. Being financially prepared for emergencies will save you a tonne of stress in the long term. Get started today!
Harper has penned articles on a wide range of topics from travel and lifestyle to finance and career. When she’s not busy freelance writing, Harper likes to spend her time hiking, reading, or watching classic movies. To read more of Harper’s published work, visit her Tumblr account.