The fact that we never really know what lies around the corner is what makes life exciting, but for many of us, uncertainty breeds anxiety. There’s a lot to be said for living in the moment, but often, it’s also wise to try and plan ahead. You never know when you may encounter unexpected costs and if you’ve got an emergency fund, this can minimize the impact of a curveball and enable you to recover quickly. If you’re thinking about putting money aside, here are some of the reasons why you may need to smash the glass and some tips to help you save.
Why would I need an emergency fund?
There are many reasons why you may need access to funds without prior warning. Here are some examples.
We all know that we are mere mortals. Even if you think you’re fit and healthy, nobody is immune to illness. One day you could be fine, the next you could be facing an uncertain future as a result of an accident or a diagnosis that seems to have come out of nowhere. The cost of treatment can spiral into hundreds, thousands or even millions of dollars. If you found yourself needing hospital treatment, could you afford the therapies recommended by doctors? If you don’t already have comprehensive health insurance, it’s a good idea to shop around and compare plans and prices, but it’s also wise to have money tucked away just in case you do need access to funds one day.
You may think that you’re an exemplary citizen, but everyone is capable of making mistakes. If you needed advice from a lawyer like those at https://rowdywilliams.com/, could you afford it? It only takes a drop too much alcohol when you’re driving, or an altercation outside a club and you could find yourself facing criminal charges and significant legal costs. Of course, none of us like to think of ourselves in this situation, but the reality is that people do experience these circumstances. Hopefully, you’ll never be in a scenario when you need a legal expert to defend you, but if you do, having money set aside could help to alleviate additional stress.
Even if you’ve got a steady job, it’s impossible to assume that you’ll be employed and receiving a paycheck every month for the rest of your life. Companies can fold, businesses may make cuts, and you may find yourself facing the prospect of losing your job. If you didn’t have a steady income, would you be able to bridge the gap between leaving one job and finding another? If you’ve got a nest-egg, you could dip into this while you’re searching for vacancies.
If you’re married, you live with a partner, or you own a home or business with your other half, have you thought about what would happen if you split up? Nobody wants to dwell on the prospect of a relationship ending, but if you’re invested in a relationship financially, as well as emotionally, it’s wise to consider the impact of separation. If you’ve got an emergency fund, you could use this to pay for accommodation if you have to move out of your home, to cover legal costs if you’re considering pursuing divorce proceedings or to buy out your partner if you plan to stay in the house or take control of a business.
If you’re settled in a home you love, you may think that you’re set for years to come, but sometimes, opportunities can come out of the blue. If you wanted to move or you had to move, for example, a new job offer came up, or you wanted to move closer to your parents and take on the role of carer, would you able to afford to put down a payment on a rental property or buy a new house? Sometimes, life can take unexpected turns, and you have to make decisions quickly. If you’ve got money, this will give you flexibility and ease pressure if you do need to up sticks at short notice.
Tips to help you save
Most of us would like to be able to save more money. When you’re paying off a mortgage, or you’re renting a house, you’ve got bills to pay and mouths to feed, it can be difficult to put money aside on a regular basis. If you’re struggling to save, here are some simple ways you could boost your balance.
Budgeting is a simple but effective way of keeping tabs on what you spend each month. It can be hard to keep track of transactions, and it’s very easy to assume that you’ve got more money in your account than you have. If you have a budget, this can help you determine how much disposable income you have and enable you to put money aside each month. Work out what’s coming in and what’s going out, and this will help you determine how much you have available to save. Once you’ve got a figure in mind, you can set up a direct debit, and you’ll be bolstering your balance each month. If you’re new to budgeting, this guide should prove handy https://www.forbes.com/sites/robertberger/2015/07/26/7-tips-for-effective-and-stress-free-budgeting/#6e8698f26872.
Lowering household costs
If you haven’t got much money left over at the end of the month, there may be ways you can save money and reduce household costs. Use the Internet to compare prices for insurance policies, energy providers and TV and broadband packages and set a weekly budget for groceries. Take advantage of vouchers and coupons and shop online so that you can keep tabs on the cost of your cart.
We all know that life is unpredictable. One day, you could be fit and healthy and blissfully happy with your partner and the prospect of being faced with legal charges or unemployment could seem ludicrous. The next, you could be dealing with a very uncertain future. You may not have a huge amount of money to put aside, but having a nest-egg could help you survive potentially tricky times.