There are countless reasons to make sure you are taken care of should an emergency knock on your door. Emergency funds are something that many people plan for when it comes to financial planning. If you’re looking to set yourself up for success, here are a few benefits to having a cash cushion:
You can take care of yourself in an emergency
Obviously, the number one reason to have an emergency fund when planning your money is so that when emergencies happen, you have money to take care of yourself, no matter what. Whether it’s a medical emergency or something that happens to your home and where you live, a cash cushion can keep you afloat when “bad things” hit the fan.
Instead of worrying about independent medical examinations and how you’ll cover them, if you don’t have health insurance with savings for emergencies, you can have more peace of mind.
You can make job choices with a bit more freedom
When you’re struggling to make ends meet or even when you simply don’t have enough of a buffer to be between jobs, you make decisions on jobs that aren’t exactly what you’d want. When it comes to your career and the jobs that you accept, when you have enough savings in your emergency fund to take care of you for a time should you be jobless, then choosing the right job becomes a lot easier.
With more savings, it’s easier for you to sit back and enjoy the freedom of being able to work a job that you love instead of taking whatever comes your way out of sheer necessity.
You can avoid added financial stress during hard times
When things come up in life that are hard to deal with, from breakups to job loss to death in the family or medical emergencies, having financial stress hanging over your head can also be one of the difficult things you could experience. It’s hard to grieve properly when you are worried about putting food on the table. It can be nearly impossible to work when you are facing a challenging injury.
With an emergency fund in place, you can forget about financial challenges for a minute and focus on what is needed right now. This can make it much easier for you to pass through the difficult times and come out on top on the other side.
Peace of mind is everything
If there is one simple reason why you should be considering an emergency fund, it’s the peace of mind that it provides you with. That is everything. Financial freedom truly allows you to breathe a little and rest assured that, no matter what, everything will be okay. It may take a lot of discipline and hard work to get there, but when you save up enough money to take care of yourself through different stages of life, peace of mind is a byproduct.
You can do more with your money
With extra savings, enough to cover your bills, and an emergency fund, you can do more. You can invest and grow it; you can make big decisions like buying a home or starting a business; and you can make purchases that don’t make you feel guilty. Knowing that you have a cash cushion that will take care of you should things like job losses or pandemics happen helps you have more freedom with how you spend your money. Talk to your financial advisor about how to best plan an emergency fund today. Your future will thank you.
If you want to reap the benefits mentioned above, consider how important it is to start saving today. From financial stability to having enough to get by when times are hard, there are many reasons to set up an emergency fund as soon as you can. Financial freedom is worth the hard work.