Having an emergency fund is impossible, you say? Well, it doesn’t have to be. Having a little emergency cash around will result in fewer financial worries. Whether it’s unexpected auto repair bills or that credit card payment that got away from you this month, if you had a little bit stashed away, you wouldn’t have a problem putting the emergency behind you.
If you receive a utility shut-off notice or a bill that’s due to a medical emergency, you really do not have a choice; that bill will get paid. That means something else will not. It may be difficult to decide which bills to pay first. If you don’t repair the car, you will have a more difficult time getting to work. If costly prescriptions are necessary to help speed your recovery, it will likely cost you more in additional Doctor bills and perhaps even a Hospital visit.
Establishing a Rainy Day Fund
Setting up a rainy day fund will enable you to weather an emergency. The ability to utilize emergency cash that’s allocated for certain unforeseen circumstances may be priceless. A rainy day fund doesn’t have to take a large amount out of your paycheck every week. If you can find just $10, you would have $500 by the end of the year. However much you decide you can afford, there are two keys to success here. One, you have to set that money aside every week, without fail. Pay yourself first. Secondly, you should put the money someplace that is not too easy to get at. The harder it is, the more you will resist temptation to spend it on something that you really don’t need. If you have a bank account, you should check with your employer about automatic payroll deductions for an emergency savings account. If you never touch the money, it will be there when you need it.
How Much Do You Need?
If you talk to a financial planner, they will tell you that you should grow your rainy day fund until you’ve established enough money to cover three months worth of your monthly expenses. However, that’s a lot of money. If you are like most people, you are struggling every month to pay for the basic, and 3 months is too much. That is true especially is you have a lot of debt you are trying to pay off, since that debt should always get paid before serious savings begins. Still, the right answer here is that you have to have something stashed away, and you should try hard to make that as much as possible.
Another Option to Obtain Emergency Cash
Emergencies may occur at any moment. If a financial crisis develops before you’re able to build a rainy day fund, you can contact a representative from Embassy Loans to inquire about borrowing money. If you have a car with a clear title, you probably qualify to borrow that emergency cash today.
Planning always beats emergencies. Put away just a few dollars a week and before you know it, you will have that nest egg to weather a storm. And if the winds start to blow before your nest egg gets build, remember that Embassy can help.