Posted on Wednesday 07 October 2015
There is no doubt you've read and heard about the importance of having an emergency fund . In today's questionable economy, an emergency fund is more invaluable than ever. You never know when life is going to give you some blows, but they're sure to happen. From your water heater going out, on to your car breaking down--you don't want to be left down and out and having to turn to a payday loan company to take care of it. But, without an emergency fund that is exactly where you could find yourself. Now, this article isn't about preaching to you, the reader. However, this is about making you more aware of how an emergency fund can really benefit you when you need it the most. If you'd like to live with less stress in your life, it all starts with maintaining and managing a proper budget ! The emergency fund is a huge part of this. Let's take the time to examine why an emergency fund might just be your life saver in a time of crisis.
According to statistics, within British Columbia 45% of Canadians don't have an emergency fund and no immediate way to deal with an adverse life circumstance. The CBIC shows that other residents within British Columbia and surrounding areas have less than a month worth of savings to handle an unexpected life event. Neither of these classifications are good for anyone, but Ontario and Alberta residents appear to be the most at risk with regard to being prepared for an actual life emergency. You'll find several significant reasons listed below as to why an emergency fund will allow you to live more comfortably and with peace of mind.
While you might be familiar with some of the points within these reasons for an emergency fund, it is hoped you might gain more encouragement to prepare and plan ahead. Establishing a financial plan now can save you significant stress and heart-ache down the road.
1. What if your car breaks down? You have to worry about it, unless you have some other form of protection, but most people don't. Having some funds set aside to protect yourself for this kind of emergency is absolutely necessary. How would you get to work, pick the kids up from school, run errands? Think about it!
2. What if you lost your job or were laid off? No one is expendable today and you could be laid off without a moments notice. Without a cash reserve to keep you afloat how would you make ends meet? How would you take care of a family?
3. What if there was a serious illness within your immediate family? While we hope to remain healthy throughout our lives one never knows, sickness is inevitable. This can create stress due to a loss of work and a lower income. Without any kind of fall back plan or savings this can be disastrous!
4. Could you be financial independent if faced with divorce? Some couples rely on one another to stay financially healthy, but what if there was an end to your relationship? Divorce is at an all time high so it makes sense to consider the risks of this happening. Could you manage everything on your own?
5. What if you face major home repairs or improvements? If you're a homeowner you understand the expense this can create and if you don't have enough home equity built up this can fall on your shoulders. If it is your AC or a roof repair, it simply can't wait. Planning ahead is certainly vital to a circumstance such as this.