Whether or not you believe money makes the world go round, there’s no doubt how important it is. Being responsible and on top of your finances gives you control of your life and means a potentially stressful situation can be avoided. As well as making sure you have enough funds to cover your outgoings each month, it’s important to be prepared for whatever life throws your way, After all, life isn’t always sweet, so we need to be ready when things don’t go to plan! Here are just a few of the reasons you should have an emergency buffer.
Losing Your Job
There are plenty of reasons you could lose your job. While we’re over the worst of the recession, companies every day are still being forced into administration taking the jobs of their workers with them. You could face disciplinary action and be fired, you could be made redundant or become injured or ill. While there are personal injury lawyers who can work to get you compensation if it wasn’t’ your fault, you’re still not going to be able to work while you recover. Losing your job can be incredibly stressful and even demoralizing, the last thing you need on top of this is worrying about how you will pay the bills while you find something else.
Investing in bricks and mortar is a wise choice, and does give you financial security and stability. However, it’s not completely foolproof. If something happens to your home, you can find yourself in a real pickle without an emergency fund. Perhaps a flood, fire or other natural disaster does some serious damage? Maybe even criminal damage like arson can leave your property in ruins. You could be burgled or your home could be seriously vandalised. While you should have all of the relevant insurances, if these things were to happen having an emergency buffer in the bank can make the process much smoother. You may need to stay in a hotel for the night or purchase a couple of essential items before being refunded by the insurance company. Most households claim they would be in financial trouble if a bill higher than $300 came through unexpectedly. Let alone if something more serious happens where you need to fork out thousands.
You Car Breaks Down
Car trouble is an absolute nightmare, and when something goes wrong with your beloved motor, you can bet it’s not going to be cheap to fix. Whether you’ve had an accident and your car has been written off, or it’s broken down to the point of no repair, a new car is incredibly expensive. If you rely on your car for work or other commitments, it’s not going to be something you can live without. Having some money saved allows you to cover any repairs right away, or replace your car entirely if it’s a write-off.
Do you have an emergency fund? If one of these situations were to happen, would you have enough saved up to be able to cover it?