The emergency fund is the storage of money that is kept aside so that it can be used in unpredictable conditions in life.
If you face any unexpected financial crisis in your life, then the best emergency fund
will help you to sustain in that situation.
Some people out there think that emergency funds are not that important for them. But such people must listen to what experts are saying.
Experts are always saying that the emergency fund is becoming a compulsion. To improve yourself at personal finance an emergency fund is becoming the most crucial need of the time.
You may know how to manage personal finance and how to start saving money into the best emergency fund.
Any best emergency fund is always like an insurance policy that helps you whenever you are facing a financial crisis in your life.
However, unlike insurance policy, emergency funds don’t have fixed premiums. It is a savings where you do not need to pay any monthly or yearly premium.
Rather, you are just putting aside a considerable amount of money from your income.
Emergency fund is known as easy to access money in case of an emergency. So everyone needs to make some contributions to this emergency fund in their life.
We Present To You 6 Reasons On Why To Choose The Best Emergency Fund
There can be a lot of reasons why one should try an emergency fund. But we are here going to
elaborate on some of the very important reasons that will motivate you to contribute to the emergency
funds every month and grow the best emergency fund for your health, family, house, business, or
anything else you look at as an important thing in your life.
#1. To Avoid Debts
One of the best reasons to contribute to an emergency fund is just to avoid debts for you. You don’t
have to worry about anything when you are contributing to the best emergency fund for you. The
reason is that whenever you will find yourself in trouble you can simply use that fund rather than asking
for debt from some friends or financial institutions.
The best emergency fund helps you to reduce the chances of taking a loan in case of unfortunate
events. If you have some amount of stored money, then it becomes really easy to pay off sudden bills
such as medical bills or any accidental emergency. Also, the best emergency fund supports you in
clearing your previous debts easily and protects you from getting involved in future debts.
#2. Reduce The Financial Risk
It is very clear that when we are talking about the best emergency fund it is all about to avoid and
reduce the financial risks. Nobody wants himself to indulge in the financial crisis due to any situation.
That is why we are always looking for the best methods to feel secure and never fear due to financial
risk. If you earn your living from a single source, then it becomes essential to have the best emergency
fund. In case you become unemployed or fall sick, the emergency fund will help you to pay your daily
expenses for a certain period. In case you are the only bread earner of your family, then you should
consider having an emergency fund for at least a year.
#3. Stability For Self Employed People
People who are self-employed or work as a freelancer do not earn a particular amount of money every
month. In case the business is not functioning well or they are not getting enough work, the best
emergency fund will help them keep going in this kind of unpredictable situation. You can also use your
emergency fund to rejuvenate your business. But on the other hand, if you don’t have an emergency
fund established for you then it will become hard for your financial stability. We always face financial
risks when we are running a business with less revenue or doing a job with a low salary. That is why it
becomes important for all of us to grow an emergency fund for us.
#4. Tackle Health Issues
If you are suffering from any serious health issue or you have older members in your family, then the best emergency fund will help you to pass through any unpredictable medical condition.
It is easy to get routine check-ups. and pay hospital bills with the best emergency fund. Health issues can be extremely costly sometimes and insurances are not able to pay all the bills.
Also, health issuance take time to provide the required money. In that case, emergency funds become very supportive because of their quick accessibility.
It doesn’t matter that you are fit or not. Anyone can have health issues in the future.
So what will you do when you will feel health risks to your life? Most probably you will take loans for
your treatment or you will borrow money from one of your friends and then you will have to return it to
him. But things won’t work this way, you must start investing in an emergency fund.
#5. To Maintain Your Own Home
People who own a house need to have regular maintenance of the house. Though most people keep
separate money for renovation and wall paint, the best emergency fund helps you to deal with
unexpected repairing issues in plumbing and other electronic home appliances such as air conditioners.
Repairing your house becomes expensive sometimes. So, it is better to set an emergency fund before
the occurrence of unexpected events. The issue is not only with the home, but also there is an issue with
everything that you have. Maybe it is your laptop, maybe it is your car. What’s next when you lose your
smartphone which is worth $500. How will you buy a new smartphone when you don’t have an
emergency fund. Waiting for the next month’s salary is never going to be such a great idea.
#6. To Achieve Financial Goals
We all have financial goals along with materialistic goals. Financial experts always relate these
materialistic goals with finance. For example, if you are willing to buy material, let it be your new car.
You want a new car. But how will you buy a new car when you have no savings in your account? You will
take a loan, Right? But that is not the best idea. You must go and save some money every month for
your car. You must add some lump sum amount to your savings to make it the best emergency fund.
After that, you can achieve your financial goals in life.
