It’s always good to have emergency savings for whatever life throws at you. Ideally, this should be a buffer that covers your expenses entirely for around 3-6 months. This money should also be easily accessible to withdraw when you need it. You might decide that your money is better off in a long-term investment account, but this shouldn’t be touched. Rather, it’s better to have your money stored in a place where you can call upon it in times of crisis, such as your 72-hour kit. This article will outline five types of issues that you might need your emergency cash fund for below.
Legal Troubles
Despite your best efforts, there is always the risk of running afoul of the law. As a result, it makes sense to have money stowed away for any legal costs, whether they involve paying for a high-quality lawyer or simply getting by when a member of the family might be in jail. When you consider that there a whole host of reasons why one can end up in legal trouble, this is always worth planning for.
Emergency Repairs
No matter how hard we try, sometimes your beloved possessions, whether it’s your car, your shower, or your heating, are prone to simply break down. Then we have to bring in an emergency plumber, mechanic, or engineer to sort out the job. In order to make sure that you have enough money to quickly shell out for these types of issues, an emergency fund should definitely be planned out well in advance. Otherwise, the problems might not even get fixed, causing even greater worries in the long run.
Funeral
Funeral expenses are something you might not want to think about, but they are incredibly expensive, adding much unnecessary stress to an already difficult process. While having the money on hand cannot smooth over the grief that you might feel after losing a loved one, at least you will be able to make sure that they can have the send-off that they deserve.
Medical Expenses
While you might have good health insurance, it’s not always a given that any procedure or care you need will be entirely covered, such as a difficult operation, dental procedures, or emergency mental health care. That’s why you should have an emergency fund for medical care that can take the edge off any medical problem that you may have.
Job Loss
When you lose your job, like so many people have done in the last year due to the coronavirus pandemic, it is not always a given that you will be given the right benefits. This is especially true if you are working on a freelance contract. You should be prepared for any disruption to your working life by having enough money on hand to smooth over those difficulties. Additionally, if you want to leave a job that you are no longer enjoying, having a “goodbye fund” can help you to leave that job with the knowledge that you will not bankrupt yourself in the process.
I’m a 20-something stay-at-home mother and wife. I have an amazing husband, a beautiful daughter, two loving dogs, and a lazy cat. I wouldn’t change my life for anything! I love to read, listen to music, cook and blog!
Speak Your Mind