You may ask,” why and how necessary is it to have an emergency fund when you constantly earn anyway?” A well-thought-out financial strategy includes an emergency reserve.
Emergency savings enable you to handle unforeseen needs without using high-interest credit cards or taking out a loan.
You don’t want to suddenly drown in debt or refuse to attend to those unforeseen situations and settle to living inconveniently. With this, the optimum time to start saving for an emergency is now.
People usually set aside money for an emergency fund to assist them in unpredictable circumstances like unemployment and sudden medical operations.
There’s also critical and incidental home and auto repair and a family member’s untimely death or disability. Terrible stuff, I know. But also a reality and uncontrollable, sometimes inevitable.
According to a Bankrate poll, just approximately 4 out of 10 individuals in the United States could cover an unexpected $1,000 bill with their savings.
Also, based on Bankrate’s study from 2021, one-quarter of those polled have no emergency funds. You don’t want to be one of them, right?
Having an emergency fund might provide you peace of mind, knowing that you’ll be able to pay for a major bill if it arises. And I think the peace you’ll gain from saving money is something that doesn’t have any money equivalent.