Hi guys, Happy New Week; I trust your day was good or is going well.
Emergency, as we see in the title, is a situation that happens without premeditation; it usually isn't planned for and often requires urgent attention. In as much as an emergency occurs without our knowledge, we shouldn't just wait for these unfortunate events to happen before running around to handle or tackle them, hence the reason for this prompt.
What's your plan for an emergency fund??
People plan for so many things in life; some plan for weddings, birthdays, childbirth, etc., but how many people think and plan for any unfortunate eventuality? How many? not so many I guess. Some people plan to change their wardrobe, some their car but people plan for unforeseen circumstances.
Well, there are so many ways one can plan towards their emergency fund; like I said earlier, an emergency isn't something we expect, it just occurs, and if you didn't plan for it, trust me, you would be so distraught.
I remember when my family still lived in a communal rented apartment (ps: I don't know if this is a thing, but what I intend to talk about is more or less a situation in which a compound contains three to four flats and the tenants all live together), so there was this family, they were really doing well, the husband was working in a good company and earned a decent salary, a little above the average I believe, the wife didn't have anything doing, she just sold some little household commodities within the neighborhood. They were living well; they even had a car, which was like a luxury in those days. Most families couldn't really afford it, but they had one, a pretty decent one. At some point, the husband lost his job, and from the look of things he didn't have a planned emergency fund.
You would be asking how I knew that, a few months after he lost his job, their lives drastically turned around, I think this could be attributed to the fact that there was no plan in case of any eventuality, after some time, they couldn't even retain the apartment they were living in, as the landlord kept on harassing them, I don't know if the husband and wife tried to look for other jobs because at a time they had to relocate to their home town because of the whole issue, sad right? I know.
Steps in Planning For Emergency Funds
Setting Goals
I have goals to set aside some money each month after I am paid, this will be used in case of any form of unplanned eventuality. I set this goal because I do not want to be stranded in case of any emergency, as I hate to be in a helpless position. I don't even think anyone loves to be there though. So yeah, first things first is to make a goal that you intend to achieve; these goals should be realistic and time-bound.
Start Saving
It's not just enough to set a goal, work towards the goal, and that means you have to start saving towards the emergency fund. One thing about saving is that if you're consistent it will be evident as you will achieve the seemingly impossible amount you planned to save; in fact, in life, everything grows with consistency; just keep doing it consistently, and it will keep compounding until you reach your goal.
Be Self-Disciplined
Self-discipline, as they say, is being a law to yourself, not someone saying don't do this and you refrain from it or do this and you do, it is rather you saying to yourself I want to do, and putting your emotions in check to cause all of your being to work towards that desired goal.
Define Emergency
Another thing you want to do is to actually define what an emergency is; what are those situations you face, that you say yes, this is an emergency, and then you pull out the funds you have kept for that purpose to handle it. Will not having a particular dress to go for a friend's wedding at a particular time be termed an emergency? Only you can tell, no one else, hence the reason you should clearly define what would pass as an emergency.
Always Replace
After sorting out an emergency, don't just stop there, let the cycle continue, try to replace what you have taken out, so as to be able to meet future challenges or emergencies.
Insurance
In this part of the world where I come from, most people don't believe the insurance guys, they feel they are out to get their money, and won't pay when the need arises, but from what I can say insurance helps, I would advise that you insure your properties and even your life, as no one knows what will happen the next minute hence the need for insurance to help you bear the risk when some sort of emergency comes up. Imagine having a car and you insure it and then on a faithful day you get involved in a crash, and there are some damages, with the help of the insurance, the amount to be used to fix the car wouldn't be so much depending on the severity of the damage versus how much you insured it for. So yeah insurance is also a way of planning for emergency funds.
So these are some of the ways I plan for my emergency funds, and I will advise that if you haven't considered the thought of planning for emergencies, then you should read this again. I hope someone learned a thing or two. Are there other ways you plan for emergency funds? I’d love to read them in the comment section😃
This is my entry for the #indiaunited weekly contests. To get more information about the contest, kindly go here.
Thank you for stopping by
All Images are Mine Except Otherwise Stated