Unfortunate circumstances can be difficult to predict, which is always why it's important to be prepared for the worst. Robert Jain, as well as other names in the world of finance, will agree, which brings us to the topic of an emergency fund. Most households have this set up, and for good reason. It's in your best interest to create one for yourself if you haven't already. For a better understanding of how this can be done, read on.
There are many ways that emergency funds can be used, but one of the best applications is in regard to medical expenses. It goes without saying that a visit to the doctor can be costly, especially without insurance, and this doesn't even include rates for prescriptions, procedures, and the like. This is where the emergency fund can come into play, as names such as Bob Jain can attest. In fact, this is one of the best uses worth noting.
Next, it's worth discussing the possibility of using an emergency fund for auto-related reasons. For example, if you get into accident, you may have to cover the costs of repairs done for your car, especially if you lack insurance. What if you're a perfectly safe driver, but you start to experience mechanical trouble when on the road? In situations like these, where expenses tend to be high, dipping into your emergency fund is a no-brainer.
Now let's discuss a few ways that an emergency fund shouldn't be used, starting with luxuries. For example, if you're planning on taking a vacation within the year, you shouldn't dip into your account that's used for emergencies. This goes back to the unpredictability associated with them. One must stay focused on their priorities, after all. If the vacation in question remains a goal, slowly save your money over time. Eventually, you'll have enough to justify the expense.
Additionally, emergency funds aren't to be used in conjunction with student loan payments. To say that student loans are important would be an understatement, and while they can be difficult to pay off, your emergency fund shouldn't be put at risk. This is where the saving of money, from week to week, comes into play. Any savings that you build during this course of time should be used to pay your loans. There are other purposes that your emergency savings can be used for.
There are many ways that emergency funds can be used, but one of the best applications is in regard to medical expenses. It goes without saying that a visit to the doctor can be costly, especially without insurance, and this doesn't even include rates for prescriptions, procedures, and the like. This is where the emergency fund can come into play, as names such as Bob Jain can attest. In fact, this is one of the best uses worth noting.
Next, it's worth discussing the possibility of using an emergency fund for auto-related reasons. For example, if you get into accident, you may have to cover the costs of repairs done for your car, especially if you lack insurance. What if you're a perfectly safe driver, but you start to experience mechanical trouble when on the road? In situations like these, where expenses tend to be high, dipping into your emergency fund is a no-brainer.
Now let's discuss a few ways that an emergency fund shouldn't be used, starting with luxuries. For example, if you're planning on taking a vacation within the year, you shouldn't dip into your account that's used for emergencies. This goes back to the unpredictability associated with them. One must stay focused on their priorities, after all. If the vacation in question remains a goal, slowly save your money over time. Eventually, you'll have enough to justify the expense.
Additionally, emergency funds aren't to be used in conjunction with student loan payments. To say that student loans are important would be an understatement, and while they can be difficult to pay off, your emergency fund shouldn't be put at risk. This is where the saving of money, from week to week, comes into play. Any savings that you build during this course of time should be used to pay your loans. There are other purposes that your emergency savings can be used for.
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For more financial guidance, kindly consult Bobby Jain.. Free reprint available from: The Best And Worst Purposes For Emergency Funds.
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