An emergency fund is something that I always recommend people have. Too many people out there do not have one, which can be scary and sad to think about since there are so many positives to having a well-funded emergency fund.
Below are several reasons for why you need an emergency fund:
An emergency fund can bring security.
You never know if something may pop up in your life and become a large expense. An emergency fund can help you feel a little less stressed because you know that you will have money set aside in preparation for an unexpected event like this. You never know if something medical will come up, if you will lose your job, and more.
If you have an unstable income or are self-employed.
If you are self-employed or if you have unstable income, then an emergency fund is a BIG need in your life. This way, if you have a bad month or if there is the potential for a bad income month, then you will have something to help you out and not feel desperate in hard times.
You have a family.
If you have a family, then an emergency fund is a need as well. With children, you just never know what will happen, and an emergency fund can take some of that stress off of you. It will also lead to less stress for your children as well because they will not have to see and/or experience the stress you are having.
You have a high deductible health insurance policy.
We have a high deductible health insurance policy, so we keep extra in our emergency fund in case anything were to come up and we need to use it. It makes the stress of having a high deductible health insurance policy not as much of a headache, and we can still enjoy lower monthly health insurance premiums.
Do you have an emergency fund? Why or why not?
Image via Flickr by Kurtis Garbutt