Benefits and Tips for Preparing an Emergency Fund

Sometimes something unexpected that requires money can come at any time, that's when an emergency fund becomes something that is really needed so it doesn't interfere with your cash flow expenses.

Many of you think that an emergency fund is not an important thing that must be prepared every month. As the name implies, the emergency fund means that funds are prepared for emergency situations that require funds.


For example, as a survival fund when you get laid off, go bankrupt, experience illness, and various other calamities that can make you need funds. Funds like this are considered mandatory and must be prioritized, whether you are married, single, or still in school. Remember that you can only spend these funds during an emergency outside of your daily expenses and also your savings. So you must prepare the funds you need before you're paid again.

Emergency Fund Benefits

For those of you who have the intention to prepare an emergency fund but are still a little unsure, you can listen to the following information about the benefits of an emergency fund that you should know so that you are more enthusiastic about inserting and preparing this emergency fund.

·       As a Reserve Fund When Dismissed

When you have an adequate job with a high enough salary, you should create a reserve fund in preparation for when you are laid off or lose your job. It is with this reserve fund that you can start a business or use it to continue living after you don't have a paycheck to wait for.

·       Medical Expenses When Sick

The next benefit that you can feel is that you can use a reserve fund for medical expenses when you are sick. This also applies to those of you who have health insurance, because not all illnesses are covered by the insurance, so reserve funds are needed.

·       Free From Debt

Sometimes someone makes debt because they need funds to meet the economic crisis, but with an emergency fund, you can use it to meet your needs without having to take on debt to other people who will actually complicate your business.

Tips for Preparing an Emergency Fund

It is sometimes difficult to save a reserve or emergency fund because you are still thinking about your daily needs, for that you can listen to the following tips on how to prepare a reserve fund which is very important for the survival of everyone, including you.

·       Put in a separate account

To keep your reserve funds from being disturbed by savings funds and funds for daily needs, you can keep these funds in a separate account. So that you don't have the intention to withdraw reserve funds at non-emergency times and make it easier for you to calculate how much reserve fund you already have.

·       Calculate the Number of Funds Needed

In preparing an emergency fund, every month you have to calculate how much reserve fund is usually needed, so you can determine how much fund you should set aside for a reserve fund. For example, in a month you usually set up an emergency fund of 500 thousand taking into account unexpected needs such as health and other things.

·       Consistent Saving Reserve Funds

If you don't use the reserve fund every month, don't think about spending it, but you must be consistent in saving the reserve fund. So apart from being used during an emergency, you can also use it as savings money which is very important in the future. Don't think about what is happening now but must think about the possibilities that will happen in the future.

·       Looking for Additional Income

If you want to save more reserve money, then you should look for additional income whose wages you put directly into the reserve fund so that it will add to the funds you have. But these tips only apply when you have more free time without having to put your body to work.

This is information about the benefits and tips for preparing an emergency fund that everyone needs, so don't forget to prepare a reserve fund outside of your daily needs.

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