I know that I’ve talked about emergency funds in the past, but I know that many people still don’t fully understand the importance (or don’t want to dedicate savings to that purpose). I’d like to reiterate that without an emergency fund, it’s nearly impossible to stay on target with your financial goals.
Here’s why – emergencies WILL happen. Whether it’s a lost job, damaged home, health crisis, or simply failed appliances, you’ll need to buy or repair something that you simply didn’t expect. Where will that money come from? If you don’t have an emergency fund, you’ll have to dig into savings, use credit cards, or borrow money. That will affect your progress to your goals, and you’ll likely experience a set back.
But, if you have an emergency fund? You can leave existing savings, such as college savings and retirement funds, as is, and instead use the fund. Then, once the crisis is over, you can slowly start to rebuild the emergency fund.
Convinced yet?
