Emergency Fund

There’s a reason why the emergency fund is called as such – to help you deal with emergencies. Nowadays, financial experts preach that you must have an emergency fund no matter where you are in life, whether you’re just starting on your first adult job, climbing the corporate ladder or on your way to your retirement. Life can throw you curve balls at any time and you want to be well-equipped in handling them financially, and that’s where your emergency fund comes in.

But you don’t want to keep seeing your emergency fund and you must only remember it when you’re in a real emergency. Like what they say, “out of sight, out of mind.”

And there are even more reasons why you need to keep your emergency fund out of sight.

Focus on Your Other Financial Goals

Once you’ve determined a secured emergency fund and saved it up, you now need to focus on other financial goals like paying down debt or saving for retirement. The amount that you need to save for emergency fund depends from one person to another, so if you feel safe with a 3-month or 1-year worth of monthly expenses stashed in your emergency fund, then by all means do so. But after which, you need to divert your energy on loftier goals that goes beyond just saving up for an emergency such as investing, becoming debt-free or securing your retirement.

Avoid the Temptation of Using the Emergency Fund Unnecessarily

You must have a good amount of control to avoid using your emergency fund unnecessarily. To begin with, you must first define what constitutes an emergency. Is it your car breaking down, your house needing repairs, trips to the ER, temporary loss of income or a new car TV, exotic vacations, gambling at the casino and retail therapy? Since you know you have money sitting somewhere waiting to be used, you might make the mistake of withdrawing from your emergency fund just to buy a new gadget without much thought and one that you’ll barely use.

So You Can Have Readily-Available Money in Times of a Real Emergency

The reason why you’re keeping an emergency fund in the first place is so that you can have money to use in times of an emergency. You should also remember to replenish the fund once you’ve used it up. With the emergency fund tucked securely, you will simply need to base your spending and other financial decisions based on your budget.

What if You Don’t Have an Emergency Fund?

While you should always aim to have an emergency fund, a lot of people don’t due to various reasons. And if a real emergency strikes with no fund to speak of, you can turn to cash loans for quick financial respite.

You can get cash loans quickly online with no credit check. While fast cash loans are by no means a substitute for the real emergency fund, you can get them for short-term cash gaps and minor emergencies. Just remember though that quick cash loans are borrowed money, unlike an emergency fund that you can call your own. So make sure that you’re getting cash loans for the right reasons and that you have the financial capacity to repay the loan and get back on your feet.