Financial experts recommend having an emergency fund on hand for difficult financial situations. It’s not uncommon to find yourself struggling to pay unexpected bills or other debts. An emergency fund gives you the peace of mind knowing that you can cover whatever it is you need to pay for without getting yourself into trouble.
There are many different reasons why you should have emergency savings put aside. Take a look at some of the most important reasons why you may need to use emergency funds.
House Repairs
When you own your own home, you no longer have the luxury of calling your landlord to handle any issues on the property. It’s up to you to take care of and finance any repairs you need to make. Home repairs can be incredibly expensive, so it’s important that you have these expenses put aside before they come up.
Taxes
Depending on your financial situation, you may have a considerable amount of taxes to pay when tax time comes. Rather than letting it surprise you at the last minute, it’s best to prepare for it ahead of time. Put aside a fund specifically for taxes so that you don’t have to drain your checking account when April 15th comes.
Travel
If you live far away from your family and an emergency comes up, you’ll need to travel at the last minute. Anyone who’s ever bought a plane ticket with very little time to spare knows how expensive last minute travel can be.
A good amount of emergency savings put aside means that you can finance your ticket without having to rely on your credit cards. Even though you might not like to imagine the worst, the truth is that medical emergencies and even funerals come up, which require you to travel when you least expect.
Medical Bills
Even with insurance, the cost of medical bills can be crippling. An emergency fund makes sure that you can take care of your health without having to worry about whether you can afford it. In addition to paying for your medical bills, an illness or injury may also result in you missing time off of work. An emergency fund can help cover your lost wages while you’re out sick or injured.
Financial Goals
There are all sorts of different financial goals that people may have. Whether it’s buying a house or going on a trip, having savings put aside for your goals is important in life. Make sure that you review your goals regularly to make sure that you’re on the right track, moving forward rather than backtracking. Doing so will ensure that you protect your savings.
