Emergency Funds – Funds that you can save for your ill time and never be touched except emergency.
Having an emergency fund isn’t mean that you are rich or doing well for your living, it means a lot more than that. You can easily fulfill all your financial needs when you have a good job, Can you imagine if time changes or you don’t have any job and also suffer from financial crises. It’s always a good idea to plan you for future and start saving funds as an emergency fund that helps you to fulfill almost most of the requirements. An emergency fund makes you confident and wise vision for future aspects.
Saving funds for the emergency is always a wise idea, rather than to borrow money from Credit Excel Money Lender as the interests can honestly be overwhelming for some people. Emergency funds help you avoid that extra cost of interest rates that money lenders charge for the money lend you in your emergency times.
Questions are – why do we need an Emergency Fund?
Well, everyone should know why it is important to all. You don’t even have an idea or may never know what happens to life. In that case, money lenders will lend you money but, they will also charge high-interest rates on your mortgage in return. To avoid this high-interest rate and ask money from money lenders, using your emergency funds are way better than anything else.
Here are the top priorities that can be considered as Emergency funds.
• Lost your job – It doesn’t matter how much you love your job but the question is – you never know when your company stops feeding you. You know how much cost when you lost your job or still have bills to pay and mortgages. Monthly regular income is most important to make your living smoothly. But this isn’t smooth or cool if you lost your job and not able to find a new job for days or even month. What should you do? How can you make your living? How can you pay your bills, mortgage, Travel expenses, Home, food expenses? The only thing you can save yourself by using your emergency funds and can make your living better till you get the new job.
• Medical Emergency – health is wealth, that why everyone understands how important our health matters to us. In today’s modern life, maintaining yourself fit and fine is quite important to all of us. But, you don’t know how when you need a medical emergency. Medical emergencies are not only related to your health issues but also related to accidental cases. We need money instant to pay medical bills when there is any medical emergency and for the sake of life, we have to arrange funds from anywhere, Money lenders are the only option left to you if you don’t have any emergency funds in your account. Even if you are Singaporeans, Medisave might not be enough as you will need cash payment as well.
• Unplanned visits – Everyone knows there monthly income and expense and definitely can maintain budgets according to their income source. Most of us are only have the limited or fixed amount of earning and never expect to have an unwanted expense or visits. This may cause them a financial crisis and due to a limited source of earning they won’t afford unwanted expense or visits.
Saving money isn’t an easy task. But you can start saving your emergency funds systematically. Here are few tips that help you to know how you can save emergency funds.
Calculate your monthly expenses and budget accordingly
You must know your monthly expenses to start your savings. If you don’t know what your monthly budget is, you can calculate all your bills, home rent, mortgage etc. whatever expenses you have in a month, calculate all and compare it with your income. An ideal way of leaving is – income is always more than your expenses. That’s the only way you can save your money for future or in emergency times, as no one knows, how life treats you in coming days. This is what we say, Life Happens.
Set a monthly goal for your emergency fund
Make a goal, so that you must have monthly saving unless you have an emergency. Buying new clothes or going out for weekend or movie is not an emergency. Lost your job, robbed and out of money and have to pay bills are the considered to be real life emergencies. Prepare yourself accordingly and start saving apart from your salary or monthly income.
Develop a plan – with a time period
Start making a target right from the first month and then increases it to three months to nine months and after 1 year. You can increase your saving only by setting goals for yourself. There are expenses for daily life that must be paid like – transportation, food, electricity, credit card bills, and mortgages.
Remember, Emergency funds must be the minimum 3 times of your monthly income to maximum 18 months. Assume, your monthly expense is $3000, in your saving account or emergency funds you must have at least a minimum balance of $9000 to $18000 dollars in your saving account.
Save your funds accessible from anywhere
Save your emergency money from where you can access it easily. Bank saving accounts are the ideal place to maintain weekly, monthly, quarterly, half or yearly. You have to decide yourself, how things work or suited best for you.
Stand strong – Stick to your plan
Be strong and stick what you committed to yourself. If you have decided that you have to save $500 from every month then you must stay strong to your decision. Doesn’t matter, what difficulties you are facing. This is the most essential and difficult job to save funds continuously every month to your saving accounts. Anyone can start saving your emergency funds; you just need to have perfect planning and right target in your life.
By maintaining healthy emergency funds in your account, you will help yourself to stay strong and take the decision of yours with complete freedom and confidence. This gives you the luxury to spend the funds that matter the most for you. So, start saving your emergency funds.