An emergency fund is an essential money that’s been set aside to cover any of life’s unexpected events specialists suggest that having a liquid fund of at least three to six months of living expenses. Emergency Funds protect your financial well-being. We learn from the Covid-19 situation how much emergency fund is important to have. Pandemic is one of the biggest examples that has taught us to have an emergency fund.
Importance Of Emergency Funds
#1 Pay Off Debt
Your emergency fund support you stop adding to your debt with every financial impact and cover the things you don’t budget for, like car repairs or medical costs. Use your emergency fund to handle these stressful events and make it easier for you to stay focused on getting out of debt.
#2 Begun Budgeting
When you began budgeting, you may be unwittingly leaving out some of the expenses that you need to plan for. As unplanned expenses come up, write them down and adjust your budget to include them in the future.
#3 You Only Have a single Source Of Income
If you only have a single source of income, it is necessary to have a plentiful emergency fund to help you get into an unexpected job loss or illness that keeps the main provider from serving. If you are single, work on building up your emergency fund as quickly as possible.
#4 Medical Problem
A serious medical condition charges you so high. A well-funded emergency fund can help you deal with these costs and make it easier to get through these challenging times.
#5 Job Less
Need emergency fund if you are jobless you can pay their rent, utilities, and many more thing if you have an emergency fund, you can focus on finding the next job that’s right for you.