When planning your budget, it’s crucial that you set some money aside for your emergency fund. It doesn’t matter what age you are or what you do for a living, but you need to have an emergency fund. This is because nothing is ever promised. You don’t know what may come up a week, some months, or even years down the road. If you’d like some more evidence of why it’s a great idea for you to have an emergency fund, read on and see four good reasons.
1. You May Have a Health Emergency
Your health is your biggest priority and is a source of wealth in itself and this is why you must keep it in good shape. Since you don’t know what may happen down the road, it’s important for you to have some money in your emergency fund in case you have a health emergency that calls for a lot of money. This includes oral health emergencies, which are notoriously expensive. According to the American Association of Orthodontics, about four million Americans today wear braces. This is a large number, and you too could end up as one of them.
2. You May Lose Your Job
Job loss is traditionally the main reason for having an emergency fund for most people. This is because you may end up out of a job for a number of reasons. Your bills and expenses won’t go on a break this time, so you should have a way to keep living when you don’t have a regular paycheck. Set your budget and make sure that your emergency fund can sustain you for at least six months without a job. This is the average length of time that you may have to go without a job, so it’s crucial to stay prepared.
3. You May Need to do Home Repairs
As a result of weather damage or other unprecedented events, you may need to do repairs to your home. These repairs vary from simpler ones to more complex and expensive ones, so spare some money for your emergency fund, knowing that it could come in handy for your home. Something like the roof, of which metal ones can last for 40 to 70 years, depending on the specific material that they’re made of, may fail and call for emergency repairs. With an emergency fund, you don’t need to search for loans or let your property get damaged because you can’t fix the roof in time.
4. You Could Have a Car Emergency
If you drive a car, you should know that anything could happen. From a failure of the systems to issues from an auto accident, there are a number of things that you should be prepared for. To adequately prepare for them, save enough money in your emergency funds account. This will ensure you don’t need to experience the inconvenience of not having a car to drive if something happens to the one you have. Keep in mind that windshield cracks that are over 12 inches long often call for replacing the entire glass. This and similar things may cause trouble if you can’t pay for them as fast as you need to in order to keep enjoying your car.
For these four reasons, you should have an emergency fund that will help protect you from issues in the future. You can never have too much money in an emergency account, especially if the occurrences of the last few years are anything to go by. With this in mind, write your budget and set aside enough money to keep you going when things are no longer the same way they are right now.