How do you know when you’ve become a fully-fledged adult?
When an emergency appears and you don’t go running to your parents for help, that’s when.
Now, how do you manage that? By having an emergency fund in place, of course. Ideally, you should have six months’ worth of living expenses stowed away, perhaps more if you have dependents. Building one might be tedious, but all that effort pays off when you find yourself in any of the following situations below:
- Medical Emergencies.
- Major Household Repairs.
- Car Expenses.
- Repair/Replacement of Broken Equipment.
- Urgent Relocation.
- Pet Care.
- Sudden Deaths in the Family.
- Funeral Costs.
Even if you subscribe to a healthy lifestyle, you will still get sick at some point. Plus, accidents happen. And when they do to you and yours, wouldn’t you draw great comfort from having enough cash for check-ups and medications?
Having a roof over your head involves immediate and unforeseen expenses. A sudden storm may reveal a leaking roof. Your pipes could get clogged over time.
There are so many things in a house that could demand immediate attention at any time. Thus, it never hurts to be prepared. You wouldn’t want to be left out in the cold in case something requires fixing ASAP.
In the same vein, owners of automobiles aren’t strangers to sudden expenses. Every so often, you might need to purchase a new battery, replace a busted tire or headlights, or, God forbid, see to repairs after an accident.
We might take months to save up for a major appliance at home, or for a personal gadget that’s become a necessity in the 21st century. Unfortunately, you can’t always wait that long when the said item breaks.
For example, those of us who work remotely depend on our laptops for obvious reasons. If we can’t replace or repair them immediately when needed, our livelihoods are at stake. This, ideally, is when your emergency fund would come in.
If last year taught us anything, it’s that the cost of goods can rise at any time. In a perfect world, our paychecks would also increase at the same rate, but we all know that’s not so.
There is no lead time for firing someone. Without a safety net, this could leave you desperate and in a panic for a job, any job.
In contrast, an emergency fund can cushion you for a few more months, thus giving you more time to look for a better job.
Let’s say you don’t get fired. Instead, you get promoted. Great news, right?
Yes, certainly. Do bear in mind that a new promotion or job offer could also mean relocating to a new city. Sometimes, you may even find yourself having to migrate to a new country!
While you may have been promised a hefty salary package, not a lot of companies will advance you the expenses for relocating. That won’t be an issue if you have an emergency fund, though.
These days, pets are treated very much like family. My peers are even known to regard them with more care than they would a human child.
If you can somehow relate to that, know that an emergency fund can also cover visits to the vet in case your beloved Spot accidentally eats your stash of chocolates. (Chocolate is lethal to dogs, btw.)
Learning of a loved one’s demise is bad enough. It’s even worse when it happens while you’re in the province or abroad. The last thing you want to worry about as you hurry home to pay your last respects is how you’ll pay for that plane ticket or bus fare.
Sometimes, your emergency fund will benefit other people. That is, specifically, when you die.
Yes, I know it sounds morbid, but it costs a pretty penny to bury someone properly. Do you really want the ones you leave behind to be dickering over the bill as they come to terms with their loss?
What do all these situations have in common? It’s that they happen, well, more commonly than you might think. By the time you get to middle age, you’ll probably experience at least half of these things.
While there’s no way to avoid unpleasantness in life, having the means to deal with such certainly softens the blow. So, let’s all do the responsible thing and check on our emergency funds for the year ahead, yes?