With the economic meltdown in today's world, there is need to be financial stable. We all know that often times, life throws challenges our way unexpectedly. Thus, it is very important that we all have an emergency fund. There are reasons why we need to build an emergency fund and make it a top priority. These reasons are:
Shielding against unforeseen circumstances
We cannot predict life. All we have to do is prepare for any wave that may arise. Thus, having an emergency fund is like a safety net that allows you to handle these unexpected expenses when they arise.
When you know that you can handle whatever emergency that comes your way, there is this peace of mind and relaxation that you feel.
With this, you know that you are still focused on your goals and you are not shaking.
Avoiding Debts
One of the outstanding advantages of having an emergency fund is that it shields you from the ugliness of debt.
When this unexpected expense arises, people who do not have emergency savings often resolve into borrowing money. This act can keep them in a debt state.
I will also like to add that a lot of these debts have high interest rates and this alone can make one loose guard and throw him off balance financially.
Having an emergency fund, will save you from debts and ensure that you have full control over your finances.
Financial independence
Generally, everyone wants to attain financial independence. Having an emergency fund guarantees that you are still aligned with your aspirations and your long-term goals without being hindered by constraints.
An emergency fund plays a very important role in ensuring that you gain financial independence. It helps you to navigate through unexpected challenges without depending on others for help or even tampering with your financial stability.
An emergency fund addresses immediate financial needs. It plays a pivotal role in long-term financial resilience. This is achieved when you build a habit of saving and consciously contributing to your emergency fund.
What you need to do
One thing that is also important is that you need to develop the discipline if you want to successfully manage your finances.
When you are disciplined, it also spills over every other aspects of your finances, such as investing and budgeting and even retirement.
An emergency fund acts as a shield that protects you from the financial crash that may arise from unexpected events. It gives you stability and safeguards your financial independence. This emergency fund also mitigates the risk of getting into debt.
Conclusion
By prioritizing an emergency fund, you train yourself and prepare for any unnecessary weather that life throws your way.
Hence, it is very vital to start building your emergency fund as early as you can to be able to secure a resilient financial future.
Start small by setting aside a percentage of your income every month or week as your income enters.
Set a desired target and ensure that you follow through it. Here, I recommend that you automate your savings because this makes the process easier and helps you to be more consistent.
Always have in mind that emergencies can happen to anyone and at any time. Being prepared financially is a proactive approach.
By having an emergency fund, you shield yourself from unexpected hardships and at the same time, gain the freedom to chase your financial goals.
🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸🌸Thank you for reading. See you again in my next article.
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