In life it’s best to expect the unexpected. While we may hope for the best, an emergency fund is the perfect plan to help soften the blow when it comes to abrupt financial difficulties. Typically, emergency funds are a savings of 3 to 6 months worth of living expenses although it’s up to you how much you want to put away. Life happens fast – here are some scenarios in which emergency funds can help.
Medical Emergencies in the Family
Setting funds aside can help you get through a short illness or abrupt medical emergency, while ensuring you can afford to pay out-of-pocket costs. Medical emergencies come in all forms, including accidents, illnesses and even unseen dental expenses. If you do have pets, you may consider putting money aside just for their expenses in case they get sick or injured. Most serious of all, funerals are very costly. Life insurance can take months to take effect, so in the case of an unexpected funeral it may help to have a source of cash.
Job Loss
Finding yourself unemployed is probably the number one reason for having an emergency fund. If you lose your job, having an emergency fund can allow you to pay the bills while searching for a new position. This safety net allows you to be a bit more discerning on what job you decide to take, whereas having no emergency fund would put pressure on you to take the first job offer you get.
Car Troubles
The last thing anyone wants to worry about is unforseen car repairs. With a healthy emergency fund, car repairs can be a lot less painful since money is already set aside!
Home Repairs
Whether a natural disaster does damage to your roof and siding or your hot water heater gives up in the middle of winter, having money set aside can ease the emotional burden of the unanticipated especially if the problem is not covered by your insurance provider.
Get Your Emergency Fund Started Today
Looking to set up a Savings Account? United Financial can help! Call today to get started.