What is an Emergency Fund? (a brief description)
Put simply, an Emergency Fund is a stash of cash set aside in case you lose your job, unexpected medical bills or if your health affects your ability to work.
Or alternatively the ...
Fuck You Fund. (F.Y.F)
Having an Emergency Fund is a wonderful feeling, like a breath of fresh air, the sigh of relief knowing you have the freedom to breathe fully.
We all need to save for the unexpected. Having a cash reserve can mean the difference from a minor dip in the road to a car crash.
The most kindest thing you can do for yourself.
This small (or large), depending on your circumstances, cushion in your bank account. God forbid, if something happened to you which meant you couldn’t work for 3-6 months and your insurance doesn’t cover your bills, the pressure and stress is eased by knowing you have enough money set aside and you can heal in the time required.
Alternatively, if you have had enough of your boss constantly criticizing you and your work and today is the day you tell your boss to stick his job. However, by NOT having an Emergency Fund, once again you have to be your boss’ bitch and endure another soul destroying day (brutal but true)
Do’s and Don’ts when creating an Emergency Fund.
DON’T leave the money is your everyday chequing account
DO open up a new chequing account, this way you will avoid dibbing into it when you fancy buying that nice new dress or when you are invited to drinks with your friends. You want to make it.
DON’T rely on high interest credit cards as a way to create an emergency fund. This defeats the whole point of having an emergency fund.
DO separate your savings from your emergency fund. These two amounts of money are for two very different things.
DON’T include a vacation and investing fund. These are luxuries not necessities.
Have you got an Emergency Fund? What have you learnt from having one?
Please come back later this week for 2 more blog posts:
- 10 Ways To Create An Emergency Fund (F.Y.F)
- 49 Lucrative Side Hustles