When you look at your emergency fund what do you see? While some people are happy with the amount of money they have saved, others come to realize the following: they need to make up ground in a hurry.
Nobody wants to be faced with an emergency, but you never know what is going to happen in the future. Why not prepare for the worst but hope for the best?
Here are three reasons why you need an emergency fund:
- Home repairs. No matter what type of home you live in, there could come a time when you are in desperate need of a repair. Did your furnace break? Do you need a new roof? Is your basement leaking?
If you are faced with a home repair, it is nice to know that you have enough cash on hand to take care of it without delay.
- Medical expenses. Even if you have health insurance, there is no guarantee that all of your expenses will be covered. This is particularly true if you have a high deductible plan.
There is nothing more important than your health. You should have enough money put away to deal with any medical expense that could come your way. This includes both dental and vision.
- To fix a broken down car. Your car could breakdown at any time, leaving you stranded and wondering how you are going to get back on the road. Is this something you want to concern yourself with? Some car repairs, such as a new transmission, can set you back $1,000 or more. Make sure your emergency fund is equipped to handle a breakdown.
Final note: an emergency fund can be your best friend if you are laid off or fired from your job. You can use this money to get by until you land another position.
This information should open your eyes as to why it is so important to have an emergency fund.