Introduction
Unforseen occurrences can occur in our lifetime. They are unplanned events which usually affect us badly. There's a need for emergency fund to cover the expenses of those unplanned events. Emergency Fund are very important and supportive in the times of distress. It acts as a safety net where needed money are kept for financial emergencies. Without any safety net in the form of saved fund, it often hard to handle the expenses thereby worsens the problems therein.
As there are buffer zones created in our cities to protect the human settlement from. The impeding dangers of the roads and other factors, Emergency Fund are buffer fund to cushions the effect of unexpected and unplanned events that needs money to cover its expenses and prevent it from becoming bigger problems. Such events can be medical emergencies, job losses, car repairs, house repairs etc which can be difficult times to been covered with the safety net known as the emergency funds.
Steps Adopted During Emergency Planning.
To be financial stable and buoyant, one have to build up one's emergency funds for unexpected and unplanned events. These are steps to be adopted so that a robust amount of money as set aside as Funds for financial emergencies. They include:
Understanding The Nature Of The Emergencies and Setting of goals.
Emergency can varies in their nature and everyone faced certain ones. Having a prior knowledge of certain emergencies or unexpected events to be faced will be helpful and proper to plan for their expenses. For example, in my family, Being A+ as our blood group, we are ready and plan very well for malaria fever. We get treated repeatedly and generally because of our prior knowledge of the disease peculiar to our family.
The first ever law of surveying is "starting from known to unknown". Having detailed information of certain events that occur in our life despite being unplanned or unexpected, one can still have some cash set aside for such events. For instance, Pregnant couples knows what is at stake after nine months, they get ready and plan for every eventualities or emergencies that might occur during the gestation period. Understanding our nature and predictable challenges will be helpful to cover its expenses.
Setting of goals will be helpful. Emergencies occurs unexpectedly but with goals already stated. One can handle the expenses and solve the impeding problems easily. During budget planning, emergency funds should be a goal and certain amount of money are kept for it. For example, many insurers pays their premiums as agreed because of eventualities and emergencies. It is a financial manipulation that's very important to secure one's finance and stable.
The goals sets for the emergency fund should be reviewed periodically so that the fund will be satisfied the needs. As the family grows and events during the lifetime changes, many events can happen unexpected, to be able to cover them successfully, goals should be reviewed and promptly.
Calculations of The Expenses And Budget Planning.
Emergencies cost over time will be helpful to ascertain the amount of funds set aside for emergencies. Housing and electric bills have been unique for months and needed to be covered monthly so certain amount of money will be needed for them.
In our budget, the emergency fund should occupy the topmost spot. Allocation of such fund for emergencies will be helpful to cover its expenses and paid promptly. Non essential items should be cut down and more money allocated for such basic needs likes emergencies.
Importance of Emergency Fund.
Everyone needs emergency funds because of greater importance and needs. It can't be overstated and serious needed as a safety nets. Let's state some of its importance.
Financial Security.
Ability to cover the excess and unexpected expenses can be possible because of the importance of emergency funds available. Being able to cover every necessary expenses and even unexpected ones will make one to be financially secure. Everyone wants to attain to such status of becoming financial secure so that nothing including emergencies can really upset such happy person.
Debts are usually occurrence from unplanned spending from financial emergencies. When there's need for fund and there's no allocation of money for such expenses, one will be broke and in serious debts when borrowed such amount of money to persecuted such unexpected expenses. But having emergency funds will safeguard one from being in debt and ability to be financially secure after expenditures.
Reduction of Emotional stress and Improve long term goals.
Emergencies can cause a huge toll on our emotions. Many people loses their senses as they seek funds from various sources to cover their emergencies. It have huge emotional strain and affect the performance and prosperity. Having such emergency fund will save one emotionally and easy to handle such expenses.
In my area, burial and marital rites are huge burden because of numerous unwritten expenses in the name of traditional and customary rites. Million of our money are spent for such events so having such events causes emotional pains than even the death of the loved ones. Having emergency funds will be helpful and it's coverage will makes the one happy and satisfied.
With safety nets like emergency funds, one can have long term goal and progressive economic growth. Emergency funds covers unexpected expenses which would have affect the financial success and long-term goals that will be successful and relevant.
Finally.
Emergency Fund is very important and appreciated. Everyone should endeavor to follow those simple steps to create such safety net and sustain it for years for its importance.
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