Do you want to learn how to build an emergency fund?
I recently asked you, my readers, what you want to read about right now. The majority of you told me that you’d like to learn more about emergency funds.
In today’s blog post, I answer questions such as:
- What is an emergency fund?
- Should you have an emergency fund if you are in debt?
- How much should be in an emergency fund?
- Where should you keep your emergency fund?
- Should I keep my emergency fund in a separate account?
- Can’t I just use my credit card as my emergency fund?
- How can I save enough money for my emergency fund?
Thinking about how you would handle certain life situations is exactly why today’s post about emergency funds is so important.
See, an emergency fund is something I believe everyone should have. However, many people skip this important part of managing their finances.
Without an emergency fund, you can take on debt, add to your debt, not be able to afford basic living expenses, and more. It can be very scary to live without some emergency savings.
So, why are emergency funds important overall?
There are many reasons for why you should have a fully-funded emergency fund:
- An emergency fund can help you if you lose your job. No matter how stable you think your job is, there is always a chance that something could happen where you may need money. What would you do if you lost your job and didn’t have an emergency fund?
- An emergency fund is wise if you do not have great health insurance. You may have a medical emergency come up, and you can easily spend hundreds or thousands of dollars out of pocket.
- An emergency fund is a good idea if you have a car. You just never know if it may need a repair.
- An emergency fund is a need if you own a home. One of the lucky things that homeowners often get to deal with is an unexpected home repair. Having an emergency fund can help you if your basement floods, if a hole in your roof forms, and more.
An emergency fund can protect you in many other areas as well. This can include if you have an unexpected medical expense for your pet, if you have to take time off work for something, you need to go somewhere far to visit someone who is sick, and so on. The list of reasons for why you might need an emergency fund can be a long one. [Read more…]