The Importance of an Emergency Fund

Preparing for a financial emergencyWe believe the more you’re prepared for an emergency, the less likely it will happen and even in an emergency situation, you’ll be better equipped to manage it because of your preparation.

Why create an emergency fund? Unexpected expenses are a part of life and relying on credit cards to help you manage unanticipated costs can accumulate significant interest charges. Tapping into your retirement fund can have expensive tax consequences and relying on friends or family can cause personal stress.

How much do you need to save? Experts recommend stashing away 6 months of living expenses in your emergency fund.

There are many situations when you may be required to access these available funds:

  • Job loss or layoff
  • Out-of-pocket medical expenses
  • Unexpected pet care costs
  • Exterior home maintenance repairs
  • Appliance repair or replacement
  • Car repair
  • Unexpected travel expenses
  • Paying for a loved one’s funeral

Finally, we’d like to leave you with a few other considerations when preparing for a financial emergency.

Be sure you’re aware of your insurance policies coverage and limitations.

Learn when it’s right for you to make an insurance claim; home or auto.

If you find it difficult to save money, here are some great tips.

We wish you all the best. If we can help you, please reach out to us: 519-736-8228