Why an Emergency Savings Account is Important

In today’s tough economic climate, many people don’t have an emergency fund in place, something they can turn to when an unexpected expense arises and could prove financially devastating. It’s often difficult to set aside any amount of money when you are barely making ends meet in the first place. An emergency fund is a really good idea no matter what your current financial situation is as it could mean the difference between you surviving a crisis or losing everything because you weren’t prepared.

Medical Needs

unsecured credit cards for bad credit (2)Let say, for example, that you aren’t adequately covered by your health insurance and a serious illness happens to you or a member of your family. How will you cope and, more importantly, how will you afford the necessary medical procedures that could run into the thousands of dollars or more? Set aside the fact that being sick means you have to take time off from work and you won’t be bringing home a paycheck for weeks or even months. Bills will pile up and there may be no end in sight for you and your family. This is where an emergency fund becomes especially important.

Home Repairs

Owning your own home has its advantages and disadvantages. If something goes wrong, you have the responsibility of ensuring that repairs are made. Sometimes those repairs can become very costly and they might need done immediately to avoid further damage to your home or your belongings. When you need a new roof or your furnace decides to stop working in the middle of winter, you need to have the available funds to get the necessary work done and protect your biggest investment. This holds true for your home, your appliances, even your car. If any of these need repair, it is usually right away and your emergency fund can ensure that the money is there and the repairs can be completed.

Loss of Work

Have you given any thought to how you would take care of your family if you suddenly lost your job? You could be fired, get laid off or become injured and unable to work for an extended duration. Any compensation that you receive will help a little, but it won’t be enough to live off of. An emergency savings account could mean the difference between surviving or filing for bankruptcy and it should be able to accommodate between 3 and 6 month’s worth of bills.

Food for Thought

So we have decided that it’s a very good idea to have an emergency savings account, now what? What bank should you choose and when you have chosen one, what kind of account do you really need? These are very good questions as the right bank and the right account can make all the difference. You should find a bank that is willing to work with you and that will explain to you all of your options. Finding a bank that wants to help you save will make your life less stressful and make it much easier for you to save money.

Many banks will actually charge a fee just for having a savings account and still others will require you to have a certain amount in your account at all times lest you will be fined until the account is brought back up to the required limit. There are many fees associated with some banks such as inactivity fees and ATM withdrawal fees. Find a bank that has the best interest rates, the least amount of fees and a low required minimum. In essence, find a bank that suits you best.

An emergency savings account can save you from many of life’s difficult moments and it is something that everyone should have. Take a good look at your budget and see what you can afford to do without, then take that money and put it in your savings account. This is the best place to start and now is the best time to save.

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      NHBS Inc © 2022

      NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

      Privacy Policy Terms of Use

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