19/08/2022
To launch our series called , pag-usapan natin ang EMERGENCY FUNDS!
1️⃣ What is an Emergency Fund?
- An emergency fund is a readily available source of cash for unforeseen expenses or situations. Also called a “rainy day fund”, it allows you to prepare financially for events like unemployment, medical emergencies, home and car repair; because you NEVER know when it will rain– just like you never know when a financial crisis will come.
2️⃣ What is the difference between Savings and Emergency Fund?
- Savings can either be long-term or short-term and are often used to fund a specific goal, like that couch you've been eyeing, your kid's college fund, or plane tickets to Boracay. You save for PLANNED expenses and goals.
- An Emergency Fund, on the other hand, is used to cover major unexpected and urgent expenses. It's a fund available to you so you don't drown in debt paying for an unforeseen incident.
3️⃣ Who needs to have an Emergency Fund?
- If you're someone who has a family to support and bills to pay, then you need an emergency fund as a financial security blanket.
4️⃣ Why do you need an Emergency Fund?
- Part of is preparing for any financial emergency. It will keep you afloat if you suddenly lose your job, have a medical emergency, or if you need to pay for a major house or car repair.
5️⃣ How much Emergency Fund do I need?
- Good: 3-6 months' worth of your salary
- Better: 3-6 months' worth of your EXPENSES
6️⃣ How do I start my Emergency Fund?
- Adjust your monthly budget.
- Aim for a doable amount. While it is recommended that your fund should sustain you for 3-6 months, it's also important to set a low target that is reachable in a short amount of time.
- Make saving money a habit, see a P20 bill in your pocket? Just got your bonus at work? Save it! Your future self will thank you for it.
- Don't pressure yourself. Even a small emergency fund will make a difference, what's important is that you start now!
- Still struggling? Talk to your Trusted Financial Advisor today! 💛
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