While most of us know the importance of saving money, we may not know how to save for unexpected moments in life. To do this, you should consider building an emergency fund, which can be used to cover expenses for unfortunate circumstances that can't be easily predicted. What do such circumstances entail? Are there others that are deemed less appropriate? Here is how you should, and shouldn't, use emergency funds, as detailed by Robert Jain.
One of the ways to use an emergency fund, according to reputable names in finance like Bob Jain, is in case of a medical emergency. Let's say that, for the sake of argument, that you suffer a broken leg. You may not have insurance, which means that your medical expenses will be considerably high. An emergency fund will allow you to cover most, if not all, expenses, depending on how long you've built this account for.
What if you get into a car accident or your automobile starts to break down? Auto incidents such as these call for your emergency fund to be used. After all, you must ensure that you have a way of moving from place to place. You also want repairs to go so smoothly that you won't have to worry about your vehicle breaking down, at least for an extended period of time. When it comes to your automobile, feel free to use your emergency fund.
When it comes to the worst purposes for emergency funds, let's begin with luxuries. These include, but aren't limited to, brand new TVs, cars, and vacations. While these are nice things to have, and worth saving up for, you shouldn't rely on your emergency fund for them. By dipping into said fund, you will have less that could have been used for more important reasons. If you desire these luxuries, saving your own money is the better course of action.
You should also know that emergency fund savings aren't meant to be used to cover student loans. While these loans can be difficult to pay off, there are ways to help yourself without dipping into the aforementioned fund. If you have a part or full-time job, your savings should be diverted to your student loans, ensuring that they're paid off sooner. By following through with this simple action, you won't have to touch your emergency fund.
One of the ways to use an emergency fund, according to reputable names in finance like Bob Jain, is in case of a medical emergency. Let's say that, for the sake of argument, that you suffer a broken leg. You may not have insurance, which means that your medical expenses will be considerably high. An emergency fund will allow you to cover most, if not all, expenses, depending on how long you've built this account for.
What if you get into a car accident or your automobile starts to break down? Auto incidents such as these call for your emergency fund to be used. After all, you must ensure that you have a way of moving from place to place. You also want repairs to go so smoothly that you won't have to worry about your vehicle breaking down, at least for an extended period of time. When it comes to your automobile, feel free to use your emergency fund.
When it comes to the worst purposes for emergency funds, let's begin with luxuries. These include, but aren't limited to, brand new TVs, cars, and vacations. While these are nice things to have, and worth saving up for, you shouldn't rely on your emergency fund for them. By dipping into said fund, you will have less that could have been used for more important reasons. If you desire these luxuries, saving your own money is the better course of action.
You should also know that emergency fund savings aren't meant to be used to cover student loans. While these loans can be difficult to pay off, there are ways to help yourself without dipping into the aforementioned fund. If you have a part or full-time job, your savings should be diverted to your student loans, ensuring that they're paid off sooner. By following through with this simple action, you won't have to touch your emergency fund.
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For additional fiscal guidance, kindly consult Bobby Jain.. This article, How, And How Not, To Use An Emergency Fund has free reprint rights.
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