An emergency fund is your financial safety net, built to protect you when life throws unexpected challenges your way. While preserving it for real emergencies is important, certain life events may necessitate using it nevertheless.
An emergency fund may help you cover your living costs until you find new employment. Your financial security demands that you maintain between six and twelve months of savings to handle basic living costs.
Your emergency fund will assist you in paying for medical emergency costs that your insurance policy may not cover when you or your family members face sudden health problems.
Your emergency fund will provide financial support to cover repair costs when you face emergency repairs, such as leaking roofs, burst pipe or other structural repairs.
You can pay for repairs or buy a new vehicle. Your car insurance will cover the damage, but if the damage exceeds your insurance coverage, or the car has to be written off and the vehicle is a necessity for you, you could use your emergency fund to buy your car.
When you need to take an unexpected trip for urgent family matters, you can use your emergency fund rather than resort to borrowing money from someone.
The emergency fund will serve as financial support when you face rental income loss because of tenant non-payment. This will allow you to sustain your expenses until you find another tenant.
The emergency fund can also be used when you need to handle legal disputes or sudden legal expenses.
An unplanned bill will make your expenses grow rapidly. Your emergency fund will provide the necessary funds to manage these costs.
