It’s not enough to save some money before spending anything; you should also save a portion of your salary to an emergency fund which is different from savings, of course.
Why do you need one, you ask? Here are the reasons:
Major medical and dental bills
You’ll never know when you’ll need a large sum of money to pay a hospital bill. Even if you’re healthy and young, a lot could happen and emerge. There are various possible culprits from unforeseen sicknesses to accidents. Not that I’m telling you to expect they’ll happen, but it’s better to have a fund for such events, so you won’t have to worry about where to get the money.
You might have a medical or dental insurance, but there’s no certainty that you’ll pay nothing. Besides, some procedures and operations might not be covered by the insurance, which is why you’ll need an emergency fund.
Home repairs or appliance replacements
Because we can’t tell the future, we sure will be taken by surprise when our house demands immediate repairs. Whether it’s the water pipes or electrical wires, you’ll need to spend money to fix it.
There might be an appliance that needs replacements too, such as your oven, refrigerator, or juicer. Even if that’s not an expensive appliance, you’ll still have to spend a few bucks to replace it.
Tip: Before you replace any appliance, be sure to read reviews such as masticating juicer reviews to help you save money and time.
Your car can’t be in its best condition at all times, which is why you have to add auto repairs to the reasons why you an emergency fund is needed. If you don’t have access to public transportation and you solely depend on your car, you have to make sure you can maintain it properly. But even if you drive safely and take good care of the car, accidents and unpredicted repairs might show out of the blue. Car repairs and replacements are mostly expensive, so it’s best to have an emergency fund instead of credit.
You can’t control time and other people’s lives. You might need to visit your hometown because of the death of a family member or go to a country for an emergency business meeting, and a last-minute plane ticket is costly. Instead of depending on your credit card, save money for sudden travels.