When To Use Your Emergency Fund?
Saving up is hard to do - sometimes, even harder than break-ups!
While this holds true, it is important to have savings, particularly emergency funds. However, the knowledge that you have this much money at your disposal sometimes makes it hard to manage. Doesn’t it feel tempting to just splurge and spend them all?
Still, you have to know when it’s absolutely necessary to dip into your emergency funds. Some of them are as follows:
- Real Emergencies
This is kind of self-explanatory. Your emergency funds are first and foremost saved for unexpected expenses like accidents, property damage, calamities, or health and medical crisis. These are the things that are unavoidable but at the same time, hard to anticipate. It’s good to have funds ready in case natural disasters strike and you need major repairs or if you suddenly need an operation. This way, you wouldn’t have to worry about being prepared.
- Unexpected Travels
Naturally, this does not cover spontaneous purchases of flights during seat sales! It refers to travels that you really need to take such as to care for a family member or to attend a wake and funeral when someone passes away. Of course this doesn’t mean that you’re waiting for it. It’s just better to have enough savings that you can use at a minute’s notice.
- Sudden Unemployment
For whatever reason it may be, someone can lose their jobs in an instant so it’s important to have enough funds to tide them over their incoming expenses. It is ideal to have a fund that is enough to cover three to six months’ worth of groceries, rent, and bills as well as other expenses that you’ll need in order to find new work. You’ll never know when you’ll get another, so it’s better to be sure than to go broke all the way!
Another important thing to remember is to “refill” or start all over again once you have used it up. Emergency funds aren’t a one-time thing, but rather, a continuous cycle of preparedness and anticipation. This is a good thing since you don’t have to constantly worry knowing that you have something to fall back to in cases when things go south.
So better get started with your own emergency funds!