Have you ever considered what you would do if you lost your job? It’s not a nice thought, but it’s one that you should have on occasion because life is messy and it doesn't always go to plan. Tke the world right now: we are all living in the middle of a pandemic and many people have lost their jobs and their businesses.
The number of people who are dealing with life without a furloughed job or any kind of position right now is rising, and it’s a good guess that many of them won’t have put a contingency plan into place. An emergency fund is one of the best contingencies you could have set up for yourself, and hopefully if you are living with one, you’ll see how valuable they are. However, an emergency fund isn’t just good for a pandemic. An emergency fund has so many uses. So, let’s explore five of them below.
- You've Lost Your Job
Losing your only income is terrifying and worrying, and you shouldn't have to worry any longer than necessary. So, you need to think about how your emergency fund could help. You could ensure that you have six months of funds lined up so that you have time to keep looking for a new role.
- Sudden Things To Pay Out For
The dishwasher has broken down, and you need to repair your broken dishwasher but you have no funds. Don’t worry though, your emergency fund is going to help you with that. You don't have to worry about those immediate and urgent expenses when you have funds in the bank to help you out.
- Zero Stress
If you know that you have money in the bank to fall back on, you’re less likely to feel stressed out. Having the possibility to buy what you need when you need it is a big deal and it offers you enough peace of mind that you won’t panic about it.
- You Are Liquid
When you have capital in your bank, you are able to be in a better position compared to your peers. You can use cash for short-notice expenses and then this will help when you are in trouble. The best thing that you could have is a fund to lean on when you have an urgent expense to make, and you can make some quick decisions and remain secure.
- You Can Relax
You get to do what you want knowing that if you need to, you have funds to fall back on. If you want to invest in something new, you can. If you want to quit your job because you hate it, you can. You have a lot more freedom to relax knowing that you can keep funding your lifestyle.
An emergency fund is useful for so many things, and you have to choose to save hard to ensure that you are covered. If you don’t, you could find yourself in a financial hole more often than not.