It goes without saying but emergency funds can prove to be immensely helpful. Even though this is true, it seems like there are a number of people who do not fully understand what it is that that these can be used for. What if they do not come across a circumstance where emergency funds can be effectively implemented? If you are curious as to the specific uses of emergency funds, Bobby Jain may offer insight into this list of 3 of the more crucial concepts.
1. If you lose your job, you have to be able to maintain finances for the short term. This is where emergency funds are needed and I am sure that Bobby Jain will tell you that it is important to have, at least, three months of living expenses covered. After all, you have to be able to maintain a reasonable lifestyle and the only way this can be done, following a job loss, is to save beforehand. The more that you save, the more of a financial buffer you will have, according to names such as Jain.
2. Your car may break down to the point where it can no longer be repaired. As a result, emergency funds can be put to use in order to purchase a new – not to mention potentially better – car for your day-to-day responsibilities. Seeing as how no car is going to be able to last forever, it is in your best interest to build funds over the course of time as opposed to dipping into your checking account immediately. To say the least, you will save more money this way.
3. For those who suffer an injury, you have to be able to support yourselves after the fact. Chances are that if you suffer a broken leg, for example, you will not be able to work to your full capacity; there may be times when you will not be able to work at all. As a result, having emergency funds stowed away will help to keep you solvent, especially when given the expensive nature of medical bills. Once again, saving over the course of time is the name of the game, so do not overlook this point.
It goes without saying that there are many other ways in which emergency funds can be used but I felt like these were the most important. They are times when you do not expect emergencies to come about; no one can accurately judge when or where these circumstances can unfold. However, the ability to build a nest egg over the course of time will ensure that you remain financially stable. It will take time but the effort that is taken will be more than worth it.
