Guide on Setting Up Emergency Fund for the Family’s Turn-To
EMERGENCY FUND – Are you thinking about where to put the money you have set aside for emergency cases or unexpected events?
One of the wisest things you can do most especially if you are the breadwinner of the family is to set up an emergency fund. It is different from savings as it is really allocated for the unexpected circumstances. If you have this type of fund, you and your family have something to turn anytime.
Truths be told that there are really circumstances that may catch us not totally prepared. One of the least that we can do is to set up this type of fund. When someone in the family gets confined in the hospital, when there is an unexpected surge in the electricity bill, when natural calamities have damaged your source of living – you have something to use.
However, there are also considerations in setting up an emergency fund. It is not simply taking a part of your budget and setting it aside in a can or investing it. There are also venues not best for this type of fund.
The venues where not to put your emergency fund as they are not wise places for the money you intend for the unexpected events. Here is a list of them:
- At Home – Do not place your emergency fund in a piggy bank, a container, or anywhere in the house. Although it is accessible that way, there is a huge risk that it may be stolen, wet by rain or flood, or accidently get burnt.
- Stock Market – Although there is a chance for your money to grow in the stock market, it must not be placed at risk for loss. If the trend goes down, it will affect your fund and it is not 24/7 accessible.
- Life Insurance – Insurance policies have a lot of benefits but your emergency fund should be different. The emergencies that you must be prepared for are not only accidents and hospitalizations.
- Financial Terms like “Paluwagan” – Once you joined in this financial system wherein you will invest your money and wait for your turn to get a bigger collection from the group, you have no 24/7 access to it. Furthermore, the chances is you will overspend or lose what you are setting aside for the unexpected circumstances.
The best venues for this type of fund allotted for emergencies are the bank and digital wallets. You can access it 24/7 and there is no risk of losing it if you don’t spend it.
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