Surviving Tough Times: Why It Pays To Set Up An Emergency Fund

We all know that life has its ups and downs.

One day, everything is going great. The next, the future may not look quite so bright. If times are tough, the last thing you want to worry about is being able to make ends meet. Studies show that money is one of the most common sources of stress and anxiety.

While it may not be possible to prevent every bump in the road, you can maximize your chances of being able to cope financially by setting up an emergency fund. If you don’t already have a contingency pot of money, here are some reasons to start saving, and some tips to help you boost your balance.

 

 

 

 

The Unexpected

 

There are many things in life that can impact your finances. Your health, your employment status, and unexpected incidents like car accidents or extreme storms, can all take their toll on your savings goals. If you’re involved in an accident, your home is damaged by a hurricane, or you lose your job out of the blue, you may be worried about paying bills and keeping a roof over your head.

The good news is that there are often solutions to the problems you may encounter, but immediate fix is not always available. This is why it’s so useful to have a fund that you can dip into to keep you afloat when the waters are choppy.

What About Accidents?

If you’ve had an accident while driving, you should be able to file a claim for repairs on your insurance policy. You may also be entitled to claim compensation if you’ve been injured as a result of another driver’s carelessness. If you weren’t at fault for the incident, take a look at sites like https://berkmyer.com/st-petersburg-car-accident-attorney/ and seek advice.

Get free sample chapters from my book: Not Another Personal Finance Book.

If your legal action is successful, the money you’re awarded can be used to cover medical costs and lost earnings. It’s also worth noting that it can take time to process an approved insurance claim.

Unemployment

If you’ve lost your job, and you haven’t been offered a severance package, you might be anxious about coping without a steady income. If this is the case, try and find a new job quickly. Register with recruiters, sign up to websites that advertise vacancies, and consider taking on a short-term job.

If you have skills that could benefit others, think about setting up a side hustle while you’re looking for something more permanent. You could work on a freelance basis, or use your interests and hobbies to earn money.

If you enjoy writing or baking, for example, you could start a blog or start selling your creations at local fairs. For more ideas, check out this useful article https://www.entrepreneur.com/article/293954

Damage At Home

If your home has been hit by a natural disaster, you’ll need money for emergency repairs. While your insurance should cover these costs, it usually takes time to process claims, and this is why it’s beneficial to have an emergency fund. If you don’t have savings you can use, check the details of your policy carefully, and ask your provider about emergency assistance.

It’s not always easy to save, especially if you don’t have a huge amount of disposable income at the end of the month, but putting aside a small sum each month could make all the difference. Make the commitment to fund a savings account each month.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

 

Image: Bullseye, Jeff Turner CC by 2.0