Unfortunate circumstances can be difficult to predict, which is always why it's important to be prepared for the worst. Robert Jain, as well as other names in the world of finance, will agree, which brings us to the topic of an emergency fund. Most households have this set up, and for good reason. It's in your best interest to create one for yourself if you haven't already. For a better understanding of how this can be done, read on.
One of the ways to use an emergency fund, according to reputable names in finance like Bob Jain, is in case of a medical emergency. Let's say that, for the sake of argument, that you suffer a broken leg. You may not have insurance, which means that your medical expenses will be considerably high. An emergency fund will allow you to cover most, if not all, expenses, depending on how long you've built this account for.
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.
When it comes to the worst purposes for emergency funds, let's begin with luxuries. These include, but aren't limited to, brand new TVs, cars, and vacations. While these are nice things to have, and worth saving up for, you shouldn't rely on your emergency fund for them. By dipping into said fund, you will have less that could have been used for more important reasons. If you desire these luxuries, saving your own money is the better course of action.
It's also worth noting the possibility of student loans being paid off with emergency savings. Needless to say, this should be avoided. Your student loans should be taken seriously, but this doesn't mean that they should come at the expense of funds used typically for medical reasons, unemployment, and other unfortunate events in life. Slowly save the money that you make, before funneling it into your student loan payments. Before you know it, your loans will diminish.
One of the ways to use an emergency fund, according to reputable names in finance like Bob Jain, is in case of a medical emergency. Let's say that, for the sake of argument, that you suffer a broken leg. You may not have insurance, which means that your medical expenses will be considerably high. An emergency fund will allow you to cover most, if not all, expenses, depending on how long you've built this account for.
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.
When it comes to the worst purposes for emergency funds, let's begin with luxuries. These include, but aren't limited to, brand new TVs, cars, and vacations. While these are nice things to have, and worth saving up for, you shouldn't rely on your emergency fund for them. By dipping into said fund, you will have less that could have been used for more important reasons. If you desire these luxuries, saving your own money is the better course of action.
It's also worth noting the possibility of student loans being paid off with emergency savings. Needless to say, this should be avoided. Your student loans should be taken seriously, but this doesn't mean that they should come at the expense of funds used typically for medical reasons, unemployment, and other unfortunate events in life. Slowly save the money that you make, before funneling it into your student loan payments. Before you know it, your loans will diminish.
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