In a perfect world, we’d all have an emergency fund and we’d all be able to see what’s around the corner. Unfortunately, that’s not always the case.
There are, however, ways of preparing ourselves for the unexpected. If you not sure what an emergency fund is, it’s exactly what it sounds like – it’s essentially money you’ve set aside to prepare you for any emergencies that life might throw your way.
In between paying bills, living expenses, rent or mortgage, car repayments, birthdays, anniversaries, and annual family vacations – not to mention incidental expenses – it’s hard to imagine having any of your salary left to put aside into an emergency fund.
Don’t feel bad, even high income earners can stumble occasionally trying to put funds aside. Ask yourself the questions below to figure out your personal strategy for creating the perfect emergency fund.
Do I need an emergency fund?
While we could all benefit from having an emergency fund, for those with pre-existing medical conditions such as diabetes, asthma, or food allergies it’s especially important.
Whether it’s for prescriptions and medicines, treatments, medical bills, or an unexpected trip to the emergency room, having an emergency fund can help reduce stress and worry.
How much should I have in my emergency fund?
While it’s impossible to say just how much money one should have in an emergency fund, it’s generally agreed that six months' worth of living expenses can provide a good cushion.
The main thing is to get started. Set a realistic target about just how much you can actually put aside so you can begin right away.
Saving six months’ worth of living expenses is incredibly ambitious for most of us, and if saving doesn’t feel tangible, we’re unlikely to stick it to our goal.
If you’re able to save just $200 a month that amounts to $2,400 over a year. Even just $1,000 will make a big difference during the unfortunate event you or your loved ones has a medical emergency. Whether it pays for prescriptions or X-rays, every cent helps.
If, for example, your goal was to save $2,400 a year for your emergency fund, once you reach that goal you’ll be pleasantly rewarded not just from the interest you will have earned for your savings but from the motivation of achieving your goal.
Momentum often builds momentum, so after reaching your first target, try increasing your goal to another $100 or $200 a month. This slight increase, of course, makes you even better prepared.
When You Haven’t Saved For A Rainy Day
While it’s impossible to prevent untimely emergencies, at Ferratum Canada we like to think we can provide peace of mind through an easy and flexible loan giving you access to money quickly.
We offer a friendly, straight-forward Microloan solution for small cash amounts between $100 and $1,000 all done through our simple and convenient website.
Now that’s relief!
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