14:38 20 January 2014
An emergency is by definition something you cannot really plan for; it is unexpected and serious. You cannot predict when something bad is going to happen to those who are close to you. You also cannot be sure that when an emergency strikes you will be able to use credit instead of cash. This is why it is important to create an emergency fund.
Here is what could happen if you do not have an emergency fund. In this example, consider the problem of losing your job.
If you had an emergency fund, which contained several months' worth of funds, you could have been in the clear. The best saving option is six months' worth of bills. You would be out of the financial bind and while your funds would be tight, you would not be looking at how to pay off such a large amount of debt.
Setting up an emergency fund is not difficult. There are plenty of savings account options to help you out. You can set up an account easily and place so much per week or month into the account. Soon you will have the funds you need to handle any urgent situation.