It takes a tiny sum to create and maintain an emergency fund. Everyone should have one, which is useful in the most difficult situations. Without another place to draw money, your savings account or other account will be stressed.
Savings Account and is intended for
accumulate a much smaller amount over a shorter period of time. With this fund, you
get extra security without affecting the long-term benefits of an economy
Account. The amount needed for an emergency fund is so small that you will not be able to
notice that he came out of your check. It makes a big difference when the
It is time to use money for something important.
How does investment help
Credit cards have interest rates and savings accounts can not collect interest when money continues to be paid. An emergency fund is intended to be used for small or large amounts. Withdrawing money from an emergency fund has no consequence. Investing in this type of account is smart, and it can increase or decrease depending on your personal preferences. At a minimum, you want your emergency fund to grow enough to cover three months of spending. It is not necessary to deposit the money at one time, so set an amount and increase it slowly until the goal is reached. You can even configure it to extract a specified amount from your current account .
Types of emergencies
Automobile repair, health care and divorce are among the
emergencies requiring special funding. For a car repair, there is no
guarantee that the insurance will cover all damages. With a health
In case of emergency, bills accumulate in a few hours. Do not have money to get
treatment can put you in a life or death situation. A sudden divorce can put
all the finances at risk, especially if your major partner drains the
main accounts. It's a shame, but an emergency fund will keep you afloat.
until a lawyer or judge makes corrections.
What to avoid
Do not take much of your
current finances and dedicate it to an emergency fund. It will only force
divert funds to situations that are not qualified as an emergency. try
keep the amount you transfer little, so that an emergency is not "created"
strengthen your new emergency fund. And just like a savings account, the fund
is intended to be used for specific purposes. An emergency fund is not intended to
be used for everyday wants or needs.
If you can manage a checking account, an account
emergency fund will be a piece of cake. Think of it as the only investment that
always gives positive dividends. Even if you do not use it, an emergency
funds will be there to protect you from the world.
About the author
Hello! I am Vipul, professional blogger and online advertiser based in New Delhi, India. Always looking for new ways to make money, I detail all the opportunities that can help anyone to make money. You can connect with me on Twitter Linkedin & Facebook