Emergency Funds: Why You Need One
When you start a family, you need to be prepared for anything that might happen. Often as young adults or single people, we live our lives in with a more care-free attitude and fail to prepare for the future. Once you have kids, of course, planning ahead becomes much more important and there are certain things that you’ll want to do.
Having an emergency fund can be important for a number of reasons. What would happen if you suddenly needed to repair your roof? Do you have the funds? In this article, we are going to look at some of the reasons why you should have an emergency fund. Read on to find out more.
What Is an Emergency Fund?
If you are unfamiliar with the term ‘emergency fund’, you should know that it is exactly what it sounds like. Usually, families will have a separate savings account that they will keep their emergency fund in, in order to avoid spending it on day-to-day items. An emergency fund is only large as you let it with some families having thousands in theirs and others just a few hundred. Next, we’ll look at some of the reasons why you might want to have an emergency fund.
If you live in a home with a gas boiler, you probably rely on it to heat your home and keep your family warm. During the winter, this can become even more essential and if you have young children, the last thing you are going to want is your boiler to break down. So, what happens when it does, and you can’t afford to get it fixed or replaced? Replacing your boiler is not cheap but if you have some funds in your emergency savings account, you’ll be able to cover the costs.
A lot of the reasons why you might need to have an emergency fund are related to home repairs but this is where you and your family will spend most of their time so if something goes wrong, it will be a large issue. Roofs can get damaged in the winter and if you have a leak in yours, it could get worse over time. With an emergency fund, you can deal with the problem as soon as possible. Don’t forget to get an expert to deal with your roof repairs so you don’t end up making the problem worse!
Do you rely on your car to get your family from A to B every single day? Many families need their car to get to work, drop their kids to school and just generally do tasks such as the weekly food shop. Cars can be very expensive to repair and if you get in an accident, the cost might not be covered by your insurance. This is why you need to have an emergency fund set up to deal with any problems as soon as possible. If you don’t, you’ll struggle to maintain your family routine.
While a lot of the medical procedures in the UK are available on the NHS, you might find that you encounter an unexpected medical expense. For example, if you require a certain treatment that is not covered by the NHS or you suddenly need dental work done – this can be very expensive. Many families rely on their emergency fund to cover these expenses but if you don’t have one, you’ll find yourself in a bit of both. Make sure to plan ahead for any unexpected medical expenses and you’ll thank yourself later.
How to Set Up A Fund
If you don’t already have an emergency fund set-up, you’ll want to make sure that you do this as soon as possible. We would recommend that you take out a separate savings account and that you add whatever money you can to this each month. If you have a partner who can help, they can also add some funds over the course of the year. If you keep your savings and your general bank account separate, you’ll find it easier not to spend it.
It is also worth checking out some tips to help you live on a budget. This isn’t easy but once you get into the swing of things, you’ll become an expert at it.
As you can see, there are many reasons why having an emergency fund is important, especially for families. If you don’t have one set up already, make sure to consider everything that we have discussed and use our tips to set one up today. Once you get started, you’ll thank yourself in the long-run when you can rely on your emergency funds to get you through a hard time.