Not only savings must be prepared, but an emergency fund is equally important. What is an emergency fund? An emergency fund is money that is collected and only used when you have a need. There are often cases where a person does not have any money left to cover sudden pressing expenses. An emergency fund can be a protection against this risk.
In order to live a calmer life, follow the 5 advantages of preparing the following emergency funds.
No Debt Needed
In life, there are many unexpected expenses that can occur. Examples are usually broken household appliances, family members who fall ill, or children’s school fees. However, some people can also be in debt because of an inability to manage finances. Preparing an emergency fund will prevent you from borrowing money from friends, family, or even moneylenders.
One of the advantages of an emergency fund is protection against crises that may occur. Starting from the economic crisis, the threat of layoffs, disasters, to the huge increase in hospital fees. Setting up an emergency fund is important to try so that you are ready to pay pressing bills.
Especially when there is an economic crisis or a world crisis that has an unfavorable effect on your source of income. An emergency fund can be used to support life and family for several months to years until finally you can return to work with a reasonable income. This is also a guarantee of life that is always safe in … Read More