Managing your money well from month to month is important, but having some savings in the bank as a buffer is always going to be a smart move. The recommended amount is to first start with $1,000, then work your way up to 3 months of expenses, and then 6 months of expenses. It’s really not a matter of if, but when you’ll face an emergency, and you’d be surprised when one may pop up. Here are five important reasons why you must have an emergency fund. 

An unexpected bill or expense crops up

In life, it’s always best to expect the unexpected. And when it comes to finances, you just never know what’s around the corner. From a broken down washing machine to a car that won’t start, you never know when you’re going to wake up one morning and have to shell out hundreds on something you had no idea was going to crop up. From repairing and replacing items to paying unexpected bills, having savings in the bank means you don’t need to scrabble around finding the money. You can buy or pay off what it costs and move on with your day.

You get fired

Being let go from your job is up there with one of the most stressful life events a person can go through. This is because our jobs are so much more than a workplace we go to each day – they’re our stability, and form part of our identity. Having this taken away can rightly cause a whole lot of stress. Maybe you’ve been fired because of a silly mistake or something you did wrong, or perhaps the company has been made bankrupt or had to close down (I survived a massive 10% layoff at my old job). Either way, having savings that can cover your important bills for a few months gives you some breathing space. It lets you look for another job without the worry of falling into arrears, debts or the risk of losing your home.

You’re out of work long term or permanently

Losing one job and trying to find another is stressful enough, but what if you’re unable to work long term – or permanently? Perhaps it’s due to an illness, accident or mental health issue. While there’s help available for those who can’t work for health reasons, it can take some time to get signed up, approved and start receiving your money. Check out resources like veteransdisabilityinfo.com or https://www.welfareinfo.org/ for more information.

You have a baby

Even if you’re not planning on having a baby, sometimes they can be a wonderful surprise. Having a child is one of the best things you’ll ever do, but it certainly doesn’t come cheap. Having some savings in the bank allows you to purchase the items you’ll need to get started like nursery furniture, a pram and a car seat. 

There’s some kind of disaster

If there’s some kind of emergency, having access to money can often make the situation a whole lot easier. Maybe your pet gets ill, you might need money up front for an operation before you can claim back on your expenses. Maybe it’s a dental or medical emergency with one of your kids, or perhaps you ended up stranded in a forgein country after a vacation goes bad? What about a natural disaster, like a hurricane? It seems far fetched but you never know, if the worst were to happen you’ll be so glad you were prepared. 

Remember, it’s not a matter of if, but when! Plan ahead now and build up an emergency fund for yourself!

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