Developing an emergency fund is not one that every family in the world can boast about but if there is something that families should have as a very important part of their family routine then it should be an emergency fund and just in case you are still thinking there is no need to have an emergency fund, then I am really excited that you clicked on this post because reading it will give you reasons why you need to begin to create an emergency fund right away if you do not have one already.
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What is an emergency fund?
Although I feel like I am already repeating what you know already but I just need to remind you that an emergency fund is the fund you set aside for certain unexpected needs, there are days when things suddenly happens and you just need funds to sort them out real fast and the next pay check isn’t in sight so it is important to build an emergency fund system for your home and for your business, you also need to always remember that you do not have the right to touch the emergency fund except there is really an emergency where you have no other option but to touch the funds in question
Why do you need an emergency fund?
Setting up an emergency fund really prevents you from getting into those very annoying debts that you have been trying to avoid, or just imagine that you recently just got out of a particular debt and you have made up your mind not to walk that path anymore but then this very strong and urgent emergency comes up, instead of running right back into debt, you have your emergency funds somewhere to save you.
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It is a wrong idea to mistake your credit cards for an emergency fund or to even think of an urgent loan app as a means of emergency funds those are not emergency funds they are only a means to make you run into debt again, not saying using credit cards is a bad idea it really does show up at the perfect time but it should not just be confused for an emergency fund.
How to create an emergency fund.
Have a specific target for the amount you want to build up for emergency, when you have a target it will become easier for you to work towards a particular goal. These target should be enough and sufficient to cover up your expenses for 6 months when the target as been set then you must create a way to fund that particular emergency fund sometimes it may mean you have to cut down on some expenses but it is just very important that you do it.