While most of us know the importance of saving money, we may not know how to save for unexpected moments in life. To do this, you should consider building an emergency fund, which can be used to cover expenses for unfortunate circumstances that can't be easily predicted. What do such circumstances entail? Are there others that are deemed less appropriate? Here is how you should, and shouldn't, use emergency funds, as detailed by Robert Jain.
When it comes to the best purposes of emergency funds, medical emergencies should be discussed. Whether it's a broken arm, a flu shot, or what have you, it goes without saying that you'll have to pay a certain amount for each visit to the doctor. If you lack insurance, costs can rack up, so it makes perfect sense to use the savings you've accumulated in your emergency fund. This is just one of the multiple uses supported by authorities on finance, Bob Jain included.
What if you get into a car accident or your automobile starts to break down? Auto incidents such as these call for your emergency fund to be used. After all, you must ensure that you have a way of moving from place to place. You also want repairs to go so smoothly that you won't have to worry about your vehicle breaking down, at least for an extended period of time. When it comes to your automobile, feel free to use your emergency fund.
What are some of the ways that an emergency fund shouldn't be used, though? Let's start with using the savings for luxuries that, simply put, aren't needed for day-to-day life. If you already have a laptop that performs all the actions you need it to, do you need a brand-new computer that you may not be able to afford? You may feel compelled to dip into your emergency savings but understand that they're meant for more important purposes.
Additionally, emergency funds aren't to be used in conjunction with student loan payments. To say that student loans are important would be an understatement, and while they can be difficult to pay off, your emergency fund shouldn't be put at risk. This is where the saving of money, from week to week, comes into play. Any savings that you build during this course of time should be used to pay your loans. There are other purposes that your emergency savings can be used for.
When it comes to the best purposes of emergency funds, medical emergencies should be discussed. Whether it's a broken arm, a flu shot, or what have you, it goes without saying that you'll have to pay a certain amount for each visit to the doctor. If you lack insurance, costs can rack up, so it makes perfect sense to use the savings you've accumulated in your emergency fund. This is just one of the multiple uses supported by authorities on finance, Bob Jain included.
What if you get into a car accident or your automobile starts to break down? Auto incidents such as these call for your emergency fund to be used. After all, you must ensure that you have a way of moving from place to place. You also want repairs to go so smoothly that you won't have to worry about your vehicle breaking down, at least for an extended period of time. When it comes to your automobile, feel free to use your emergency fund.
What are some of the ways that an emergency fund shouldn't be used, though? Let's start with using the savings for luxuries that, simply put, aren't needed for day-to-day life. If you already have a laptop that performs all the actions you need it to, do you need a brand-new computer that you may not be able to afford? You may feel compelled to dip into your emergency savings but understand that they're meant for more important purposes.
Additionally, emergency funds aren't to be used in conjunction with student loan payments. To say that student loans are important would be an understatement, and while they can be difficult to pay off, your emergency fund shouldn't be put at risk. This is where the saving of money, from week to week, comes into play. Any savings that you build during this course of time should be used to pay your loans. There are other purposes that your emergency savings can be used for.
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