Always be prepared for the worst and hope for the best. You probably believe nothing bad will ever happen to you or to a loved one, but life has a way of changing things in an unexpected way. Having an emergency fund will protect you from going broke and desperate in these situations.
Here are some reasons why you should start an emergency fund right away if you don’t have one already:
1) In case of job loss
Losing a job can be pretty terrible, especially if you don’t have any emergency savings. This situation could happen either because you got fired, your company went bankrupt, or due to you becoming sick and having to stay in bed for many days, you never know. Many finance specialists recommend having at least three to six months of living expenses saved in case something happens to your primary or only source of income.
2) Unexpected health problems or dental expenses
No one knows when they’re going to break a tooth or suffer any accident or have any disease that isn’t typically covered by health insurance. You’ll probably need money for tests, samples, second opinions. Medical issues can be super expensive and can make you go broke if you don’t have any money saved up.
3) Pet Care
Much like you, your pets also get sick, and there’s no way to predict when this will happen. The average cost of pet care is around $1,288.50, and can go up to $4,000 or even more. You won’t want to be left choosing between not being able to save your pet because you can’t afford the medicine or procedure necessary to keep them with you longer.
4) Surprise car repair
Cars can impact on your ability to go to work, get the children from school, shop for groceries or any other daily activities. Therefore, if your car breaks, it can give you a massive headache. If you have savings, there’s no need to worry so much about this issue anymore, and you will be able to afford a rental until your car is ready for use again.
5) You need to move
You never know when you’ll have to pack up on short notice and find a new place to leave. Maybe there was some natural disaster, like a hurricane, for example, or even if your landlord asked you to move, you need to prepare, so that don’t stay without a place to sleep.
6) Home repair
Anyone who owns or rents a property is susceptible to this. Maybe your drains are clogged, your pipes or your roof started to leak, and you need money for the repair, and if you have some emergency money, you won’t get caught off guard.
We can all agree on one thing: one of the worst things about being an adult is having to pay taxes. There’s always a possibility that you calculated your taxes wrong, or that you forgot to pay your property tax bill, which will make you broke.
8) Funeral Costs
It’s horrifying to even think about this possibility, but you always need to be prepared for the worst, like the death of a loved one. You probably don’t imagine it, but dying can be really expensive. The average cost of a funeral can be as much as $11,000 or even more.
9) Emergency Travel
If you, for example, live far away from your family and you need to travel last minute to see them because of an unexpected issue, you’ll need to have some money spared in your emergency fund.
10) Avoid credit card debt
Even if you lose your job, your bills will keep coming. To avoid dropping your credit score and paying big interest rates, you need to have an emergency fund for this.