Most people have heard at one point or another that it’s smart to have savings put away. However, knowing you should do it and actually doing it are two different things. Sometimes people don’t have the self-discipline to put away a portion of their paycheck every month, and would rather spend it on immediate gratification.
However, it’s important to know all of the reason why you may need it in a pinch. When you have a realistic idea of things which could go potentially wrong, you may be more inspired to put savings away more regularly. Here are some of the most common reasons why people need savings suddenly, which you may one day too.
No one ever expects to get injured or ill and find themselves with a huge medical bill. Regardless of how good your insurance is, there will always be a portion to pay. Depending on your injuries or illness, it could be tens of thousands that you owe.
Having emergency savings on hand ensures that you have the peace of mind knowing you won’t go starving trying to pay it off. In addition to paying for medical bills, you may also have to miss work. Lost wages can leave you stressing about how you’ll pay the rent and feed your family.
There is nothing more stressful than getting in your car to go to work in the morning, and your car won’t start. If there’s one thing that’s true about cars, it’s that they’re never cheap to repair.
Rarely are repairs under a few hundred dollars and sometimes even thousands. However, with an adequate emergency fund, you don’t have to stress. You may also be able to afford to rent a car until yours is repaired.
Credit Card Fraud
Identity fraud happens more often than you might think. Getting locked out of your credit cards and bank account until things get straightened out requires needing some money in the meantime. If all of your assets are frozen, you’re out of luck!
However, you won’t be out of luck if you’ve put aside some emergency savings to draw from so that you can pay for your basic needs.
Unfortunately, life is rarely predictable. You may find yourself having to travel last minute for unforeseen circumstances such as a death in the family, or urgent work matters.
When it comes to buying plane tickets, the earlier you buy your tickets, the cheaper they are. Therefore, purchasing a ticket with little time to spare can be astronomically expensive. However, your emergency savings fund ensures that you have the money to cover it without having to use your credit cards and pay massive interest rates.