This type of situation may bring havoc to your life except there is pre-planned, called emergency pean to reduce or minimize the damaging effects of such circumstances.
In this case, the emergence plan is “emergency fund” while experts differ in their opinion regarding how much you should have in an emergency fund, there seems to be consensus on having it.
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Why All Women Need To Save Emergency Fund
An emergency fund may be defined as a certain amount of money put aside for use when something urgent abrupt an algorithms needed an event to occur.
It is often referred to as “rainy day fund” usually saved for an unexpected occurrence such as job loss, cars break down and its repair erosion, medical treatment, home decoration etc.
Having this fund will help you to reduce any unpalatable event that surfaces at the time you are financially prepared to confront it.
Aside from feeling better with the emergency fund, it serves as a bulwark against debt when something unplanned happens.
Although it is normal to feel sad, depress and frustrated, yet you will be happy to see your emergency fund, giving you security and protection from what could have put you in despondent position.
If you aim to have a successful financial plan, having an emergency fund is a pre-requisite.
As long as you are a human and continues to keep possession of things i.e car, house, electoral appliances and family, there is no alternate option to saving for an emergency.
WHERE SHOULD YOU NEED YOUR EMERGENCY FUND?
This question formally disturbs people who have bought the idea of saving for emergency situations.
The reprieve may have however come their way as most financial experts recommended that the fund be highly liquid for easy accessibility.
It should be noted that your money in emergency fund neither earn nor grow but help to address the danger posed by unforeseen circumstances.
The goal of an emergency fund is not to build wealth but to minimize the effect of a sudden occurrence.
It is advisable to use the money you save in the bank for emergency purposes and not the credit card that set you into debt.
HOW MUCH MONEY SHOULD BE IN YOUR EMERGENCY FUND?
The opinion of experts differs in this regard which Dave Ramsey is of opinion that expenses covering three to four-month is enough.
Imagine yourself being a victim lay off or sacked from office, what cost would you still have to pay? These are the required amount you are expected to save as an emergency fund.
Think of the money you incur on your daily and monthly needs, shelter, transportation, water, food, groceries, gas etc.
what you need to do is to determine what you live off of every month and multiply that x number of months.
While what you need for an emergency depends on your personal decision, experts have come up with factors that could help you to determine how much you should save. These include the security of your jobs, the number of your income streams in your household, your personal family needs and what make you feel secure.
If your income is made from different sources, three months of savings will be enough.
if your job or business is not predictable and you rely only on a single source of income. You may have to save eight months to one year of expenses in your emergency fund.
WHY IT’S A GOOD IDEA TO HAVE YOUR OWN EMERGENCY FUND EVEN IF YOU’RE MARRIED
Having your own emergency is necessary because it provides an opportunity to decide for yourself without considering another person’s money.
It guarantees your security that your spouse money may not provide and also depicts you as someone with a strong financial foundation.
You are cleared to have control over your life when you don’t depend on your husband in emergency situations. The factors below explain why is necessary for you to have your own emergency fund.
If something bad happens in your marriage for daily up keeping and poor response from your husband to your health care, you may find your life threatened if you are without an emergency fund.
What if your husband’s identity is used to steal money and is account is jeopardized.
Surely, there would be nothing left to care for homes need except you have your own emergency funds as a back up for the family.
Consider the scenario where your spouse dies and the family insist that they will take up everything and chase you out of your matrimonial home, nothing will help you to cushion the effect of his ceremonial exit.
However, your own emergency fund may not necessarily be fully funded but should be such that it can make you fully save.
HOW TO SAVE FOR EMERGENCY FUND
If you are willing to start saving an emergency fund, you need to first ascertain clearly how much you need to save.
The best way to do this is by multiplying your expenses by the number of the month you want to save for and then create a plan to save that amount. The easiest to get this done is to have a budget plan.
On a final note, it is necessary and important for you to have your emergency fund so that your future will be decided by yourself and not others.