4 Types of Emergency Funds You Should Build up in Your Savings
Friday, April 26, 2019, 6:00 AM | Leave Comment
If you don’t have a savings account, you need to get started right away. Even if things are going well, a sudden disaster could strike out of nowhere and leave you financially drained.
A rainy day fund is essential for everyone, regardless of earnings.
These are four types of emergency funds you should build up in your savings.
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Medical Expenses
Even if you have good insurance, it’s still wise to make room in your budget for medical expenses. You can still incur considerable fees if you’re going through procedures such as complicated surgery. You also need to be aware of your health and your family’s health history. Go over your medical records and think about how much money you should be putting away.
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Legal Fees
You can’t be a law-abiding citizen and still find yourself entangled in a court case. Fighting a case, whether as a plaintiff or a defendant, can be costly. In order to afford a decent lawyer, you should put aside money for a legal fee. These can be used for all kinds of means, from paying for lawyers to covering bail bonds. Navigate to this website to learn more about the importance of bail bonds.
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Home Renovations
Sometimes you renovate your home because you want to upgrade it. Other times, you do so because you have to, due to things like intense weather causing serious damage. You should be covered by insurance, but having a fund can help with expenses. If you’re looking to give your home some upgrades, such as a redesigned kitchen, you can be happy knowing that you have access to funds designed for that purpose.
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Job Loss
Losing your job is stressful enough without being left financially insolvent. You need to put aside a portion of your paycheck every week that can act as an emergency fund in the event you lose your job without notice. Should you end up unemployed, you need to use this fund solely for essentials, such as food and gas. You want to be able to get back on your feet as soon as possible and not have your emergency fund end up depleted.
Having these emergency funds is a matter of making good decisions today so that you can prevent stress in the future. You might not be able to predict the future, but there’s absolutely no harm to be found in preparing for the possibility of misfortune. The more rounded-out your emergency funds are, the far less you have to worry about the fallout if anything serious happens.
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