I’m sure you have heard about the need to have emergency funds. In fact, you are not alone; most people have considered it but somehow, many do not act upon establishing the emergency funds. For this reason, it is good to internalize and seriously consider all the merits of having the all important fund. If you take the steps today, you will be definitely glad you did it in good time. These are four good reasons why you need an emergency fund today.
1. Losing a job or a source of income
We live in volatile times in terms of the economy; and job security has certainly become elusive. In fact, more businesses are failing leaving entrepreneurs without worthy incomes. In light of this, emergency funds will help you and your family as you look for the next best cause of action. In the past, financial experts have stated that it is wise to have savings that can cater to your basic needs for about six months. However, this is no longer the most accurate thing to do. On average, unemployment is lasting up to 40 weeks. This means that your emergency funds need to be large than before. The more the reasons to start immediately on savings.
Loosing a job does not always come as a result of being fired. Many people have felt cornered to the wall and they have had no choice but to resign. Therefore, take into consideration that a time may come when your employment situation is no longer working for you. Another instance is when you have to move on to another job. Some people will incur huge expenses moving from one state to another. All these are job related expenses and must be considered in advance.
If you find that your income flow is cut and you do not have emergency funds, you will be at the mercy of credit cards or even your family members. To avoid the embarrassment of becoming a burden, a simple decision to stash some reserve money for this emergency will retain your dignity. In this regard, the loss of an income is the most important reason why you need to have emergency funds. Sadly enough, it is until you go through the problem that you finally realize the importance of these savings. Learn from others and avoid the mistake of being caught without an emergency reserve for you and your family.