We’re told time and time again to “have an emergency fund” and “save for a rainy day, just in case…” Have you ever asked yourself… “In case of what?” Here are 5 legitimate reasons for an emergency fund:
Your identity has been stolen – You receive a text alerting you that your balance is low your bank account has been invaded; they have frozen your only debit card! Now your credit cards have taken a hard hit. This unfortunate event can take some time to work out. Having an account to back you up will definitely reduce stress in your life.
You’re stranded on the side of the road – First the check engine light… Then smoke arises from underneath the hood… It starts with the cost of a tow truck, and then you await the call of the estimate to fix your car. Whether it’s the water pump, radiator, or engine – this amount can never be good. Two to three days in the shop will usually require a rental car as well. Auto repair is always a headache. It may never happen but it certainly could!
Death of a family member – Whether it’s unexpected or anticipated, this is an exceptionally difficult time in life for you. Taking a sudden out-of-state trip can be costly. Purchasing a plane ticket or fueling up can add up quickly. Let’s not forget food and a hotel bill. Depending on the relationship you may be asked or required to help pay for some of the upcoming service. Avoid using those high interest rate credit cards with an emergency fund.
Dental surgery – It’s so painful and the cost of services hurts even worse! Seems like all dental problems happen suddenly and the cost for relief is not cheap. A root canal these days can cost close to a thousand dollars. Dental health is an important part of our overall health and we can’t always depend on insurance covering it all.
Busted water heater – Out of sight, out of mind – until you jump in the shower to ice cold water! Who do I call? Repair man or plumber? Either way, be ready! Replacing the entire water heater is not only an inconvenience but cost what most of us do not prepare for. Most homeowners spend between $725 and $1,277 replacing a water heater.
Review your budget and start setting aside some cash for emergencies! The ideal amount should range between three to six months of your income. We all know that planning ahead will provide us peace of mind. Be smart and start your emergency fund today!
“Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin
Written by FTWCCU Loan Processor, Angela Rowe.