Why You Should Have An Emergency Fund

If you want to have a strong financial position in your personal life, you should have an emergency fund. 

Here are some of the top reasons to keep that rainy day fund close at hand.

Debt Protection

If you have ever been in debt and gotten out of it, then you know the frustration that you feel when another unexpected expense put you back into debt.

An emergency fund will keep you from falling back into the red because something unexpected in your life happens. This is also a great protection against unexpected bills that will cause late fees and penalties that will only worsen your financial situation for no reason.

Investment Potential

Emergency funds do not have to be kept in cash – they simply have to be accessible quickly. There are many investments that you can start in order to gain money while still keeping cash value close at hand. Look into the different accounts that your bank may have for short-term investment potential.

Bond

You never know when you will be pulled over and arrested for something that is not your fault. 

Reasonable doubt does not really matter to the police officer on the street—you can only prove your innocence once you have bailed yourself out of jail. 

An emergency fund is a great way to protect yourself against unjust officers as well as keeping a level of legal protection for yourself.

Legal Fees

Depending on the health of your family, you may have some civil legal fees that will come up unexpectedly. Funerals, wills, weddings and many other important family events usually need some sort of legal assistance. 

Your emergency fund will help you to move through these events smoothly and easily without holding up the process.

Asset Protection

An emergency fund can help you to solve small problems before they become big problems. 

For instance, if you have a problem with your plumbing or air conditioning, it is always best to fix it up front before it becomes a large problem later. 

Without an emergency fund, you may be tempted to leave it for later, forget it, and pay much more.

Life happens when it feels like it, not when your paycheck comes in. Your emergency fund will keep you from up ending your life just because something unexpected occurs. 

It is one of the best financial moves that you can make, and it is recommended by virtually all financial advisers and top investors.