EMERGENCY FUND IS A SMART THING TO HAVE!
Financial emergencies can come in the form of health emergencies, job loss, or any other major expenses. Are you prepared to handle those things? Emergency fund is a cash that you’ve saved up for the exclusive purpose of helping you maintain your life through the emergencies that can come on your way. Without an emergency fund, you may have to depend on your credit cards and could find yourself paying off debt at double-digit interest rates for months or years to come. You also may be forced to sell assets, resulting in a loss. It is best to plan for the worst- case scenario and having an Emergency fund is a smart thing to have for it gives peace of mind!
So how much money should be in your emergency fund? Calculate all your monthly expenses. Experts recommend to have at least 3-6 month worth of realistic monthly expenses or living expenses which includes mortgage or rent, food, utilities, and other “must pay bills”. So if your monthly expenses is Php 30,000.00 x (3 months), you will need to set aside Php 90,000.00 in your emergency fund.
After determining the total amount of money as your emergency fund, you might want to open a separate savings account. It does not matter how much you can afford to save each payday, it’s OK to start with a small amount, the most important thing is you start today! Check your finances and determine how much you can put to your emergency fund. Make a habit of allocating money to your emergency fund every payday or making regular deposits into this account. Treat it is a bill, small sacrifices can make a big difference and can bring you peace of mind.
Starting an Emergency Fund is a good foundation towards financial stability.Start now!