Emergency fund: what is it and why do you need such a thing?


Money concerns, future security are some of the most pressing concerns a person can have, especially if they do not have a decent income or enough financial education to manage their finances well. .

Unfortunately, economic problems often occur among middle-income people, which is unfair, especially since life, be it social, health or education, depends to a large extent on financial capacity.

So that financial problems do not lead to a real tragedy, it is safer for everyone to have an emergency fund that they can fall back on when absolutely necessary.

With the following material, you will learn what an emergency fund is, what it is used for, and what you need to do to access it.

1. Emergency Fund: What is it and what is it for?

An emergency fund is money you keep in an account to use when you need emergency financing that you wouldn’t otherwise have. Even old people have a saying «raise white money in the dark». This is exactly how this emergency fund works: a certain amount of money that you save and don’t spend on purchases helps you get through the tough times in life: accidents, medical emergencies, anything where you need more money than you have. in your checking account.

Why have an emergency fund?

Even if the idea of ​​an emergency fund is not yet well implemented in Romania, such an account can save you from critical situations for which you could not otherwise find a solution.

Here are some reasons why you may need a lot of products by accident:

    • a car repair without which you can no longer do and without a car you can no longer move;

    • a breakdown in the house’s water network. You can’t do without running water, so you urgently need a large sum of money to fix the problem;

    • a health problem that requires expensive treatment or research;

    • Loss of employment or regular income over a period of time.

      Therefore, it is extremely important, sometimes even vital, to have an emergency fund that you can fall back on when you have a problem that only a small amount of money can solve.

2. What do you need to do to have an emergency fund?

In order to have an emergency fund to bail you out if something big enough goes wrong, you must first save money. How do you do it? How do you start raising money? Money experts recommend setting aside 10% of your income so you can add to your savings month after month and raise money without compromising your lifestyle.

However, there are times in life when you haven’t saved enough or thought about an emergency fund and you need a good amount of money. what have you done It is important to know that you can resort to the help of experts and apply for emergency loans online. These can be obtained fairly quickly, without too much hassle and with minimal paperwork. Apart from that, you can also apply for a quick loan or a loan until you reach your salary, which will get you out of a bind and give you the amount you need to solve your problems.

If you can solve your problem this time without emergency funds, that’s a great thing, but it’s important to save some money in the future, set aside a sum of money in the account, when you need emergency financing. Financing is available.

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