Do You Have An Emergency Fund?
If you’ve got a bit of cash left over after you’ve paid your bills, it’s tempting to treat yourself. You probably deserve a weekend away or a night out, but try and resist the temptation to splurge every time there’s an opportunity to save. We never know what’s around the corner, and this is why it’s so important to have an emergency fund.
Preparing for the future
Setting up a savings account can help us to plan ahead if we have designs on buying a house or a new car, saving up for the kids to go to college or splashing out on a perfect wedding. Whatever your reasons for saving, it’s always helpful to start doing it as soon as you can. Don’t save if you’re scrabbling around for a few extra dollars at the end of the month, but don’t miss the chance to put money aside if you have got a little spare. The longer you can save, the more substantial the pot will be by the time you need to smash it open.
The unpredictability of life
Life can change in an instant. Although this is what makes it so precious and exhilarating, the unpredictability of life is also what makes it so terrifying. One day, you could be absolutely fine, the next you could be fighting to stay alive with your future hanging in the balance. None of us want to think about how our lives could change dramatically, but it’s so important to prepare for all eventualities.
If you have a serious accident, for example, a personal injury lawyer could help you to claim compensation, but this could be a time-consuming process. Would you be able to cope if you had to take a long time off work or you were unable to continue doing your current job?
If you have an emergency fund, this can help with any unexpected costs. If the car suddenly starts making a screeching noise or the water heater breaks, this isn’t ideal, but at least with a fund there, it won’t mean that it’s the end of the world. If you lose your job, a nest-egg will give you a cushion and keep you going until you can find a new one.
Before you set up a saving schedule, you need to know how much you could put aside without making life too difficult for yourself. Work out your monthly budget, see how much you could realistically save, and then set up a direct debit to your savings account.
This is a much more reliable means of saving than transferring bits and bobs from time to time. If you’d like to try and save more, consider ways you could reduce spending. Opt for cheaper social activities, use coupons to save on grocery shopping and compare prices on electricity, insurance, and TV and broadband packages.
If you don’t have an emergency fund, now is the time to start saving! You never know what’s around the corner, and it’s always useful to have a financial safety net just in case life doesn’t pan out as you hoped.