If you’ve always heard that you should have emergency savings but haven’t ever needed something like this in the past, you might be wondering why this is something that people often suggest. But just because you haven’t needed to tap into an emergency reserve of money yourself yet doesn’t mean that this won’t ever be a reality for you. So to make sure you have the money you need, having an emergency savings account is vital.
To help you learn some of the reasons why you should focus on this financial idea, here are three reasons to build up your emergency savings.
To Avoid Going Into Debt
In the event that something comes up that you need to pay for and you don’t have the money in your traditional savings or checking account, one of the only options that you might be left with is to use credit to pay off this bill or make this necessary purchase. But when you do this, you sink yourself into debt that you may or may not be able to easily pay off.
Especially if you’re going to be in debt from this for a long time, the actual total amount that you’re going to be paying for this thing could be vastly more than if you’d been able to just pay for this thing with the cash you had saved.
To Not Have To Sacrifice Your Health And Wellbeing
Unfortunately, for people who don’t have any wiggle room in their monthly budget and don’t have any kind of emergency savings to speak of, certain things are going to have to get put on the backburner. For many, this includes not taking care of things relating to your health and wellbeing, like visiting a doctor or being able to move into assisted living when it becomes necessary. But if you had money saved up for these types of emergencies or potential situations, you wouldn’t have to sacrifice your health and wellbeing just because you can’t afford to.
To Give You Peace Of Mind
While it might seem like a waste to just be saving money for no real purpose, if and when something unforeseen happens in your life, having money saved for these contingencies can make a world of difference for your peace of mind. Because if you’re unable to work for a certain period of time and can’t make money to meet your monthly bills, knowing that you have a bit of a safety net financially can take a lot of stress off of you until you’re able to get back on your feet.
If you haven’t built up an emergency savings in the past, consider how starting to do so now could benefit you down the road.
