You can make use of emergency funds during the scenarios of financial debacle arises suddenly so that you need not have to draw cash from your retirement account or any other long investments you made. Discussed below are the top six reasons why you want an emergency fund.
To Stay Back from Credit Card Debt
People find it exceedingly easy to access money through their credit card. This can be alright for a short duration of time, however when you hold a balance for long time, you will have to find your interest rates soaring no matter what was the original cost. A considerable emergency fund will prevent you from credit card debt during the instances of financial chaos.
To Face the Unexpected Job Loss
If you are fired from your workplace or you left your job voluntarily, staying jobless can be daunting. Regular paycheck offers people a peace of mind and security. Even if you are entitled underemployment, it cannot replace your income. While emergency fund may not replace the income though, it will assist in bridging the gap.
To Solve Your Health Issues
You may have health insurance, but it cannot cover you much like the lost wages, advantages, etc. One thing that would stop you from getting better treatment is the finance. In such cases, having emergency fund will facilitate you to avail the best treatment as few hospitals look for upfront payment.
Retain Your House
Nothing is as secured and convenient as owning a home. Issues like a property tax and mortgage are constant all through the life; however there are several other things which can cost money continually. It is safer to be ready for problems to break down and be capable to cover for the expenses. You may even find the paint of your walls swell and get cracked. You may a flood at the basement or kitchen fired before a dinner party. For these unexpected home-based expenses, rest assured you have emergency fund to save you.
To Get Rid of Stress
One of the greatest troublesome issues for many couples is money. Emergency fund will not resolve everything but it could support by offering a quite additional peace of mind. Allotting a little bit in savings will provide you that flexibility to spend extra money while you want it and save more while you don’t. This does not only apply for married couples, but for single individual as well. Emergency fund must be utilized to remain on a safer side against unforeseen financial crisis.
To Repair Equipment Malfunction
Air conditioners are mandatory in all homes especially in the countries where it is extremely humid and hot. Air condition repairs can simply cost hundreds of dollars and when it malfunctions, you need to either fix it immediately or suffer. With emergency fund in hand, you can easily combat such troubles with your A/C.