Being prepared financially is just as important as any other prep work that you will do for yourself and your family. If you were running a marathon, you would spend weeks training to ensure that you don’t hurt your muscles when the big day comes. An emergency fund is the training but for your budget and your finances! This little stash of money will be there whenever disaster strikes! If you have unexpected hospital bills, a last-minute flight for a funeral, or even a sudden car repair, you’ll be covered! Here is why you need an emergency fund and why it’s worth having.

 

Why You Need an Emergency Fund

Emergency Funds Will Keep You Out of Debt

The point of an emergency is that these are usually the kinds of things that you don’t plan for. These are the bumps in the road that you don’t see coming. Having an emergency fund will help you stay out of debt because instead of putting that emergency charge to your card, you’ll have the cash to pay for it. If your emergency fund can’t fully cover your emergency, you’ll still charge a lot less and rack up way less debt than if you didn’t have it.

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An Emergency Fund Can Help You If You Lose Income

Losing a job or even just an unexpected loss of income for a short period can wreck your finances if you’re not prepared. If you budget down to the last dollar, not having enough money can cause you to go into debt or worse! Having an emergency fund can help you ride out the storm until you can become stable again.

 

You Can Pay for Unforeseen Circumstances Without Disrupting Your Daily Life

Instead of having to do a spending freeze or cut expenses from your budget to pay for an emergency, you’ll have the money there when you need it. This means that you can pay for those unforeseen circumstances without changing much about your daily life. While you will want to work to replace your emergency fund if you need to spend it, your everyday life will mostly be unchanged!

Hitting reset on your budget can sometimes be the best way to get started with budgeting. Consider participating in a no-spend challenge month. Find out more!

 

You Can Have Peace of Mind

Not having to worry about what you would do if a spouse had to take time off because of an illness, or what you would do if you had to get a root canal are things that money really can’t buy! Worrying about money can keep you from focusing on the things you do care about in your life! Having an emergency fund gives you one less thing to worry about. Just like an insurance plan will provide you with peace of mind if you get in an accident, an emergency fund will help you if your finances take a hit.

Having an emergency fund is just as important as paying off debt or any other things you might do to help you get closer to your financial goals. An emergency fund will help prepare you for anything from a lost job to a slight hiccup in your finances.

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