You Need To Have This Savings Fund

One savings fund that might be missing from your personal finances at the moment is an emergency fund. This is a big mistake. An emergency fund is a savings fund that you need to have.

What Is An Emergency Fund?

An emergency fund is a collection of savings reserved for emergency expenses. An emergency expense should be considered an urgent, unplanned expense that’s outside of your budget.

Why Do You Need One?

There are several reasons why you need an emergency fund. It’s a versatile safety net that can help you get through a lot of financial obstacles.

Paying for Surprise Expenses

Your emergency fund will come in handy when you have to deal with a surprise expense, like when your water pipes leak, and you need to call a plumber to fix them, or when your refrigerator stops working, and you need to get a replacement.

Keeping You Afloat

Your emergency fund can do more than help you cover surprise expenses right away. It can also help you stay afloat in times of distress when your regular source of income is not enough — or worse, when it’s not there at all.

Reducing Financial Stress

Another thing that an emergency fund can do is reduce your financial anxiety and give you peace of mind in your day-to-day life. You don’t have to worry about whether small or big emergencies will turn your finances upside down.

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