Your Emergency Fund is for that rainy day…
While this seems to only make sense, you’d be surprised how many women don’t have an emergency fund. For some reason they don’t seem to think that they will need it, at least not soon. I’ve met too many women who wear those rose colored glasses and assume life will go on without any hitches. They’re the ones who get themselves into the most trouble. Lots of bumps in the proverbial road could come up. Here are a few:
1. You could lose your job. Believe it or not, no matter how secure your position, any number of things can affect the business you work for and bam, the rug gets pulled out from under you. Maybe the economy isn’t good for your industry and the company has to cut back, or maybe in a small business the boss decides to hire his wife to save money. And while collecting unemployment benefits may tide you over for a short time, sometimes you don’t qualify. In most cases it’s not nearly enough to keep up with your normal expenses.
2. You could get sick or injured and be unable to work. An unexpected illness or injury could become quite a financial dilemma. You might qualify for some type of disability benefits, but in most cases it replaces 60% of your earnings. And unless you have a Cadillac insurance plan at work, the medical expenses can be overwhelming with the high deductibles and co-pays.
3. You could need major car repairs, or worse, a new car. If you’re lucky like I am, my mechanic knows that I tend to put things off when possible. At the same time he knows that if it’s a true safety issue I’ll do it right away, and he’s honest with me. Things we don’t even think about like needing a new set of tires or brakes can really put a dent in the budget. Putting it on a credit card doesn’t make it go away. And if it’s something with the engine or transmission and requires thousands to fix, sometimes it’s time for a new set of wheels.
4. You could need to repair or replace a household appliance. There’s probably nothing more taken for granted than a washer and dryer. It usually costs $75 just for the repair guy to walk into your house. And if you’re lucky enough to be able to fix it with a part, it still costs a few hundred dollars. You might also have to replace smaller items like the microwave or vacuum cleaner – another hundred dollars.
5. You may experience a relationship break-up with someone who lives with you and helps pay the expenses. In that case, you’ll need to have an emergency fund to help tide you over until you make other arrangements that you can afford on your own. In many cases that can take months, or even a full year.
So now you see WHY you need that emergency fund. Not that you never thought of these things, but some women need a reminder because you never know what tomorrow will bring…
Watch for my next post. It will show you HOW to build your emergency fund.
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