When our main dog died a few weeks ago, my husband and I knew we would be facing a huge, painfully unexpected expense. Hubby had rushed our dog to the vet because she was in distress. The vet tried everything to save our beloved dog but it was futile. Within minutes the vet pronounced our dog had died.
In times like these, an emergency situation, the last thing you want to worry about is money. That is why I was elated to know that we had an emergency fund just waiting to bail us out any uncomfortable financial predicaments we might ever find ourselves in to. I can’t stress how important it is to have a liquid, available emergency fund. Dave Ramsey suggests to have at least $1,000 dollars readily available so that you can meet any calamity that comes your way without reaching for a charge card.
The medical team at our vets office went out of their way to save our dog’s life. Apparently she had a tumor on her heart and it burst. Our dog was only 10.5 years old when she passed. The vet said there was nothing we could have done to either have prevented this cancer or to have known about it.
We chose to have our dog cremated rather than buried. Hubby estimated the vet bill to be around $700. I anticipated a bill over our $1,000 threshold. Thankfully, our vet was kind and our bill came in at $608. Nonetheless, this was still an amount out of our monthly budget range. We withdrew the funds out of our Emergency Fund. Now, for the rest of this month (and beyond) we have to replenish this amount back in to our Emergency Fund. That’ll mean a low-spend month of May. No worries. An Emergency Fund is a blessing. I can’t stress its importance enough.
According to Vanguard (click here) there are many good reasons why you should have an Emergency Fund:
Emergencies—from a broken bone to a layoff—are a fact of life. When you’re faced with life’s unexpected events, you can be ready.
An emergency fund is a stash of money set aside to cover the financial surprises life throws your way. These unexpected events can be stressful and costly.
Here are some of the top emergencies people face:
- Job loss.
- Medical or dental emergency.
- Unexpected home repairs.
- Car troubles.
- Unplanned travel expenses.
3 benefits of having emergency money
Aside from financial stability, there are other pros to having an emergency reserve of cash.
It helps keep your stress level down.
It’s no surprise that when life presents an emergency, it threatens your financial well-being and causes stress. If you’re living without a safety net, you’re living on the “financial” edge—hoping to get by without running into a crisis.
Being prepared with an emergency fund gives you confidence that you can tackle any of life’s unexpected events without adding money worries to your list.
It keeps you from spending on a whim.
You’ve heard the saying “out of sight, out of mind.” That’s the best way to store your emergency money. If the cash is only as far away as your closest debit card, you may be tempted to use it for something frivolous like a designer cocktail dress or big-screen TV—not exactly an emergency.
Keeping the money out of your immediate reach means you can’t spend it on a whim, no matter how much you’d like to.
And by putting it in a separate account, you’ll know exactly how much you have—and how much you may still need to save.
It keeps you from making bad financial decisions.
There may be other ways you can quickly access cash, like borrowing, but at what cost? Interest, fees, and penalties are just some of the drawbacks.
Me with my beloved dog, Chloe, in much better times. Our Emergency Fund meant that my dog would get the best care possible without us worrying over any future bill. It gave all of us peace of mind. I can’t stress enough the importance of having a readily available Emergency Fund, ready to meet any of life’s challenges. I do hope if you don’t have an EF already, you will start one today.
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