The Importance of Emergency Funds.

The importance of having or creating an emergency fund cannot be ignored because it can protect someone from financial emergencies such as unexpected medical bills like a relative falling sick, repairing your car that has faults when you do not expect, loss of job, unplanned travelling, floods, earthquakes or building collapse, home maintenance, etc.

Emergency funds give a sense of financial security. Someone who has money set aside to cover some unexpected expenses, can feel great peace of mind and can help him have control of his finances.

One good thing about emergency funds is that they can protect someone from unexpected expenses as you wouldn't have to rely on or depend on credit cards or loans, which at the end of the day can lead to debt.

Several times I have been saved from borrowing when some responsibilities I don't have a choice but to deal with them arise. There have been different scenarios where I'd ask for money but will be turned down. My eyes got opened and I realize that there is no help from people unless you help yourself because they are also going through situations.

Having an emergency fund has saved me a lot, I just have to deal with them with ease and peace of mind. I have started emergency funds since last year and whenever my siblings need money, I quickly give it to them because they are part of the reason I created the emergency fund to help them. Also, I do not need to go through stress when unexpected expenses show up because something has covered me.

Having an emergency fund can save you in the event of job loss because it can provide the safety to help cover expenses until you find a new job. It relieves you of the financial stress you would have to go through, thereby giving you time to focus on finding a new job or employment.

Another interesting part of creating an emergency fund is that it provides the opportunity to invest. Having money that is set aside for emergencies can help you take risks in investing in stocks or mutual funds, even cryptocurrency.

It is recommended that you have 3 to 6 months of money set aside in an emergency fund for expenses where you do not have to stress yourself until you get back on your feet with a good job.

These tips would help you start an emergency fund if you are just beginning:

• You have to set a smaller savings goal, rather than a large one. By doing this, you will be able to be focused and determined.

• Then start saving a smaller amount and you must be regular and consistent.

• You can automate your savings so that at the end of the week or month, a percentage will be removed automatically straight into your savings goal.

• Do not over-save as this can discourage you along the line and also affect your expenses especially if you did not plan your budget monthly.

• Do not increase your monthly spending or try to open new credit cards.

^{**This is not financial advice as we all have our different ways and methods of coping when emergencies of any sort arise, and there are ways to deal with them financially.*}