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  • Wendell Brock

The "Just in Case" Fund



Imagine a perfect day. The sun is shining, the birds are singing, and everything is going your way…until suddenly it’s not. We’ve all experienced unexpected turns in our lives. Perhaps you lost a job, an auto accident, developed serious health problems, or simply had an appliance break down. Things happen, and it can be costly, especially if you don’t have an emergency fund.


Having a dedicated savings account specifically for emergencies could be the difference between drowning in bills and stress or gracefully working through the difficulty. Having intentionally set money aside will allow you to navigate potential financial hardship and recover quicker.


The amount of money dedicated to an emergency fund will vary from person to person, depending on each unique situation. However, a general rule of thumb is to have enough in your fund to cover 3-6 months of your bills and expenses. Set a goal amount, then break that amount into smaller milestone amounts. Saving towards those smaller amounts is very attainable and will lead to greater savings. As you continue to save it gives you a sense of satisfaction and achievement.

The habit of saving is more important than the amount of saving! For some people, it might be a struggle to put money aside, especially those living paycheck to paycheck, but even little amounts of money set aside will add up and give you a financial cushion. There are many strategies for putting money aside, even ones as simple as putting aside your extra change will help. You could save a percentage of your income each paycheck, something as small as 1 to 3%.

There may be times when you receive a large sum of money, like a tax return, a gift, or inheritance. It may be tempting to spend that money, but this is a wonderful opportunity to grow your emergency fund. By putting a portion of that large sum in your emergency fund you are investing in yourself and your future stability.

Once you have an emergency fund established…when should you use it? Remember that this is an EMERGENCY fund. This is not a back-up fund. This is not a fund that you dip into if you don’t have enough to make a purchase. It is a good practice to establish guidelines; decide beforehand what you consider an emergency. This is important to establish because not all unexpected situations are real emergencies. We often create our own emergencies; we can justify our spending for anything.

When emergencies arise, this reserve fund can help you avoid turning to other sources like credit cards or loans, which will end up costing you more money. If you use your emergency fund remember to replenish it as soon as possible so you can be prepared for the next unexpected situation. Stay prepared and enjoy a Secure Tomorrow.


Image 1 by mosi knife

Image 2 by Simran Sood

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