All working individuals need to create a spending plan to make sure that you have enough money for your needs. Keeping a budget will also help you know how much you can spend on leisure and recreational activities.
Being in control of your spending habits allows you to make informed and effective decisions on all your financial resources. However, as much as you want everything to go as planned, there will always be unexpected events and expenses.
It is easy to get a fast cash loan in Singapore, but having an emergency fund will keep you assured and secured that you will be able to remain on top of everything. The following are examples of unexpected events that would require you to tap into your emergency fund.
Most unexpected expenses are about medical conditions or accidents. Although you might have health insurance, some medical issues may not be covered entirely. Or, you may need to shell out cash upfront, and the insurance company will reimburse the money later. Your emergency fund comes in handy in cases such as car accidents, falls and emergency surgeries.
It could also be that you have already used up all of your sick leaves, which means you would have to take sick days off without pay. Having extra money can help you cover your expenses during this kind of situation.
Loss of Income
You depend on your salary for your monthly expenses. So, what if you suddenly leave or lose your job? While in between jobs, an emergency fund can help you cover your expenses for rent, food and transportation. Having a buffer fund also means less pressure on you to look for a new job immediately.
This is also true for starting entrepreneurs. Having savings can help cover other expenses at home while the new business is still being set up. Once the business takes off, be sure to replace the money that was borrowed or spent, plus extra.
Having an emergency fund is extremely important when you have children. You will experience all sorts of emergencies, which range from fever, toothache, cuts, bumps and bruises to dog bites and allergic attacks. Again, health insurance does not cover all of these incidents, and you will still need take-home medication.
This also means taking time off from work or hiring a sitter to watch over your kids afterwards. Either way, this is not included in your weekly budget, so you will have to dip your hand into the emergency fund for this one.
Security and Peace of Mind
Preparing for worst-case scenarios is not at all bad. Some people may say that this line of thinking will attract negative energy. However, having an emergency fund helps people sleep better knowing that if anything happens, may it be a disaster or an emergency at home, there is a safety net for the family. This also helps you make better decisions because you will not be worried about the financial repercussions of your choices.