The fact of the matter is, anything could happen at any point. If you think that you don’t need an emergency fund, you’re wrong. Financial experts say you should have at least 6 months of expenses saved up in case of an unexpected emergency.
You may be wondering, “what could possibly go wrong that I would need THAT much money saved?” – we’re here to give you 10 reasons why you need an emergency fund.
1. You lose your job.
It could happen to any of us. The reality of getting laid off or fired is a hard one to come to terms with, but when it comes to employment, nothing is guaranteed. If you had money tucked away in the case of losing your job, you could job search for a few months without getting evicted or not being able to pay any bills.
2. You get seriously ill or hurt.
It’s scary to think about, but the possibility of severe sickness or disability is real. And if you get too sick or hurt to work, having a savings will help you stay afloat. Don’t be fooled into thinking you can survive solely on disability. You’ll want extra cash until you’re able to heal and get better.
3. Unexpected car expenses.
Ah, the joys of being a car owner. You never know when you go to start your car in the morning if you’ll have an unexpected issue. It’s not cheap to repair cars (or get a new one). Having money set aside can help with unexpected car procedures.
4. Unexpected pregnancy.
It happens. With an emergency fund, you’ll be able to prepare for your baby. Being a parent isn’t cheap, and it will be a financial demand. Be prepared.
5. Unexpected home damages/repairs.
The last thing you want is a leaky roof or a bad plumbing issue. The duties of being a home owner include fixing things when they break, and it’s not always a cheap fix. Some of the most expensive costs have to do with home or apartment. Oven goes out? Dishwasher breaks? AC stops working? You’ll want to have money tucked away for those annoying repairs.
6. Something happens to your partner.
No one is guaranteed in this life. In the unimaginable circumstance that you lose part of your income due to a death of a partner, be prepared for the financial burden that might take place. While you’re looking for another form of income, it will helpful to have money to pay the bills. Not only that, but funeral costs are outrageous. If something unexpected happens, it’s wise to be prepared.
7. Your identity is stolen.
If this happens, it can take time to get things sorted out. In the meantime, you may not have access to your credit cards or debit card. In some cases, you might even need to put your primary checking account on hold. In this case, having a separate emergency fund is vital.
8. Family crisis.
Whether it be an illness, a death or someone needs to move in for a short period – you’ll want to be there for your family. Having savings for times like this can ease the stress and be a nice comfort during a trying and difficult time.
9. Tax bills.
Don’t mess with Uncle Sam. The weight of an unexpected tax bill can be heavy.
10. Peace of mind.
At the end of the day, knowing that you can be ok for a couple of months if life throws a curve ball at you, is comforting. An emergency savings fund will bring you peace of mind and stability when the waters of life get dicey.