Life is full of ups and downs. A good moment can turn bad anytime. Nobody desires this, but that is one of the realities of life. This is why it is important to have an emergency fund in case of uncertainties.
There are many things you do not bargain for that will happen to you, but your emergency savings, the impact of those things on your personal finance would be minimal.
So, here are five reasons you need to have an emergency fund that will help solve issues when the rainy day comes.
1. It reduces your anxiety
Concerns about money could give you financial worry, especially if you need some money to address an emergency issue and you have little or nothing to fall back on. But with your emergency savings, you’ll have less to worry about.
2. It prevents you from borrowing
When you find yourself in an emergency situation and you have no money to address the issue, you’ll most likely turn to friends to borrow money, right? But if you have an emergency fund you’ll have no reason to borrow from anyone because the fund is actually meant to solve problems.
3. It helps you weather the storms
Emergencies will happen, you can’t wish it away. But when the storm hit, your rainy day fund should be there to weather the storm, because that is why have it in the first place.
4. It protects you and your family in case of a job loss
Not all jobs guarantee job security, and when the unexpected happens, you can easily have something to fall back on before you get another job.
5. It is a gateway to investment
Everyone likes the idea of investing their money in a profitable business, but if you don’t have an emergency fund you may miss the opportunity when one presents itself.