Emergencies - from surgeries to laid off - it’s hard to weather the storm. When something unexpected happens, we must be ready. That’s where an emergency fund can come in handy. For those struggling to pay off the bills, it’s critical to have a back-up plan, or in this case, some cash set aside.
If someone is in need of a quick lump sum, without the expensive credit card fees and payday loans, they can try PoolSpark (poolspark.com). This money pooling service provides the ideal opportunity for pooling resources. Family members and friends can share it. Every member can benefit from this kind of payout, especially if they want to target their resources to a long-term goal. Here is why everyone needs an emergency fund.
How Can an Emergency Fund Be Useful?
Experts estimate that around 28% of adults in the U.S. don’t have emergency savings. The rest, however, are relying on this strategy when times get rough. Why? The reason is relatively simple.
With an option such as this, a little preparation goes a long way when the unexpected occurs. It might be challenging to get started, but you'll be in a much better position if things go south. You’ll be extremely thankful if you have funds set aside to weather the storm. Some of the most common emergencies people face are:
- Car accidents
- Medical care
- Home repairs
- Additional vacation expenses
How Much Is Enough?
Many people wonder what’s the best amount of cash to put in an emergency fund. The truth is, we need enough money that can cover around 3 to 6 months of expenses. So, even if someone gets fired, they can still live off the money they saved. They can pay for the necessities and make the most of the financial struggle.
What’s the Easiest Way to Create an Emergency Fund?
For people who don’t have a high amount of cash to set aside immediately, it’s a good idea to try the money pool technique. This is a practical strategy used in developing countries.
Each member of the family or the group that wants to contribute can add a certain amount of money to the money pool. Every month, they can stash away as much or as little as they like. Once they’ve achieved their goal, they can receive the lump by taking turns.
Other than a money pool, people can try setting a goal for monthly savings. That way they can create a habit of adding funds to the account. Another strategy that can be useful is keeping the change. Whether it is just a dollar or twenty bucks, transferring that cash to a savings account can be useful in the long run. Eventually, the transactions will keep piling up.
With an emergency fund, people will get to pay off their urgent expenses. It’s a worthwhile strategy with a huge list of benefits. While some people might feel put off by the fact they have to set a substantial amount of money aside, it’s a good idea to have one. In the end, no matter what life throws at us, we will be able to get through it.