All You Need to Know About Saving for Emergencies

All You Need to Know About Saving for Emergencies


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All You Need to Know About Saving for Emergencies
By:
02 Dec 2016
Business

What constitutes an emergency?

Let's look at some real-life examples of what could lead someone into an emergency financial situation.

An unexpected car expense.

My son was in a car accident recently. It was a hit and run. He was not hurt (thank God), but his new car was damaged. Insurance could not pay him from the uninsured pool because there were no witnesses and no police report. The rental car he needed while his car was being repaired was partially covered—for $30 a day—but ultimately, he still had to pay about $500 out of pocket for it. He also had to cough up the $1,000 deductible. And none of this was his fault. Luckily, he did have emergency savings and could put the funds to good us.

Losing your job.

This is, in fact, the most cited reason for the rainy-day fund—for good reason. For many of us, our day-to-day job is our primary income source. Losing it would likely cut into our ability to pay the bills. We may need some time to find a new job. And we need reserves to feed us in the meantime.

 


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Rahul Raj

Rahul Raj

This lazy StoryTeller forgot to write something about itself.


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