The Importance of Building your Own Emergency Fund

          Every one of us needs to build their own emergency fund. It is very significant to someone else to build this fund because of this main reason it protects our saving and investment. Emergency fund is like a friend that we can rely on. It will save us from worrying and lessen our stress in unexpected major expenses that can happen in our life. Well, I did not say that something bad will happen in your life, but we just have to anticipate the expenses we will use for it if suddenly it happens. Besides, who knows it will happen, that's why? It is better to be prepared rather than become crazy thinking where to get that money. Kaya tama yun isang kasabihan nating mga pinoy “kapag may isinuksok may madudukot”. 

Photo credit: usac.ucla.edu

         You can use it in unexpected emergency expenses that will happen to you such as suddenly lost your job, suddenly got sick, damage to your property due to the calamity and any other major expenses that you don’t expect. Having this fund you can have a peaceful mind where to get those expenses. You will not be forced to borrow money with a high interest debt, pledge your accessories to pawnshop or use your credit card as the last resort. But remember, that fund is for unexpected emergency expenses only not for paying your debt or any other expenses beyond it.

         Financial expert advice, you must have at least 3 – 6 months worth of your living expenses in your emergency fund. Your living expenses are your total monthly expenses you needed in one month. This fund must be put into an account in which it is easy to be liquid or in cash, like in a savings account or in any financial instrument that can be easily to withdraw once you need it.

Additional information I shared with you the video from ANC On The Money: Building Your Emergency Fund.....↓

         So the essence of this fund is providing you a back up fund that could save you from worrying, also protects your savings and investment. It protects your saving and investment in a way that you will not be forced to divert your saving or forced to pull out your investment to that unexpected major expenses. First build your emergency fund before saving or if you can build it at the same time much better, then investment will follow.

         If you have anything in mind or additional information about the importance of building your own emergency fund feel free to comment. It will give an additional advice and information to others.

         I hope you get some tips on my blog about saving and budgeting and again Thank you for visiting my blog and see you in my next post. May god bless you!

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