Typhoon Ompong had passed and it is devastating to see our countrymen lost all their valuables and what’s worse they need to start all over again.
Not everyone knows the value of emergency fund when in fact this is one of the most significant thing that we need to have apart from our personal income.
What is an Emergency Fund?
This is the type of funds wherein we will use whenever there are unexpected situations like medical problems, sudden unemployment, natural calamities and many more.
Reminders: You should not use your emergency fund for luxurious expenses like shopping spree, vacation and buying different items.
Why should I have an Emergency Fund?
Apart from the reason a while back, we wanted to highlight much greater benefits of having such funds instead of
having a huge financial problem your entire life.
1. Saving yourself from high priced debt
Yes, having a debt is normal but our debts should not exceed our monthly salary as much as possible. Furthermore, having huge debt will encounter more bumps in the road. Think of this: It’s better to set aside money for unexpected events rather than finding a way to fix your financial situation that would lead you to borrowing money with whopping interest!
2. Emergency situations will occur whenever. It’s better to be prepared
Though we know that there are people who would refuse to think about negative things that would happen in their lives but still, we don’t know when you will be sick or your car will be broken. Remember, though you still have a stable job there’s still a possibility that you might be laid off. We never know.
3. Emergency fund will give you a peace of mind
When you are well-equipped with funds, you are free from stress since you think about these possibilities in advance. Thus, it will give you freedom to do whatever you want with your other income.
That’s why it is crucial for everyone to have an emergency fund no matter how hard it is to save. People can lose their homes to natural calamities, or might be evicted and have no money to move into a different home. As much as shelter is important, food is also essential so as the medical expenses. It’s really important to set a side a part of your income to your emergency fund.
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