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It’s the most wonderful time of the year, well, with the exception of a surging pandemic. 2021, you’re so unoriginal. If 2020 taught us anything, it’s to always expect the unexpected. No matter how on top of things you think you are in terms of your family finances or life in general, no matter how well you might be doing at the moment, things can always change and you need to be prepared for any unforeseen emergencies that come your way, especially when you have a family.
Building an emergency fund once you have paid for the essentials in life, is a really sensible way of providing your family with some extra financial cushioning should the worst go wrong and if coronavirus has taught us anything it’s that it can. Don’t believe me?
Here are 15 very good reasons why our family really does need an emergency fund:
1. Job loss
None of us like to think that we might lose our jobs one day, but these days, there really is no such thing as a job for life and a job loss is something that can happen to anyone at any time for a whole host of reasons. If you lost your job, how would you cope? If you have an emergency fund that you can dip into when you need it, it is will be a whole lot easier to cover the bills and keep the family afloat until you find a new position, that’s for sure.
2. You need to relocate
Relocating is a lot more common now than it was even just a few years ago and often doing so can lead to better opportunities for your whole family in terms of job and schooling prp[ets, but if you cannot afford the costs of relocation you could miss out, which is why having an emergency fund is imminently sensible.
3. Legal costs
None of us like to think that we or a family member would ever end up on the wrong side of the law, but from DUIs to lawsuits, there are so many things that can happen unexpectedly and when they do, in order to do our best for ourselves or our family members who have gotten into trouble, we will need to find the money for lawyers, bail bonds, and things of that nature, which as you will probably know, can be pretty expensive, so if you do not have a pot of money to fall back on, it could be a very tricky situation to navigate indeed.
4. Tax bills
If you have filed your taxes correctly, this is unlikely to happen to you but it is not uncommon for families across the United States to be hit with unexpected tax bills due to calculating errors and things like that. Owing money to the IRS is never a good experience and it can cause a whole lot of stress and strain on family life, which is why being able to access the cash you need to settle that unexpected tax bill should it arise is always going to be a good thing.
5. Car troubles
How would your family get by without your car? Chances are you would struggle to get everyone to work and school on time not to mention running basic errands like grocery shopping. But, you know that car repairs can be extremely expensive, and sometimes, there’s no amount of repairing that can keep the car in action any longer, which means you will need to find the money for a new one, which means if you don’t have an emergency fund to fall back on, you could end up having to manage without access to a vehicle for quite a while. Is it really worth taking the risk?
6. Veterinary bills
If you have pets, then it is a really good idea to take out an insurance policy that will cover any treatments and medications they may need throughout their life, but even if you have insurance,w you will normally be asked to pay for various deductibles and veterinary treatment can be very expensive. The last thing you want is to feel like you have to get your pet put to sleep because you cannot afford to pay for treatment, hence why an emergency find would be a literal lifesaver.
7. Rent rises
If you rent your home, then there is a good chance that the rent you are paying will rise on a semi-regular basis, and if you are not prepared for that when it happens, it could be difficult to keep a roof over your head. If you have an emergency fund, you can dip into that to make up the shortfall until you find a more affordable home or maybe pick up a few more hours at work. Keeping a roof over your family’s head is probably the most important thing you need to do and having savings available to you when you need them will really help with that.
8. Unexpected bills
Unexpected utility bills are hardly unheard of but they can throw your finances out of whack if you have not budgeted for them and the last thing you need is to risk having the power turned off, for example. Having cash tucked away for just such bills is something that may not seem necessary, but which you will be glad of should the problem of an unexpected bill arise.
9. Health issues
Health issues are also very common, unfortunately, and if you are hit with a nasty illness that leaves you unable to work, you may not be able to bring any money into the home. That, on top of the fact that medical bills can get very expensive, even if you have insurance, means that having a nest egg hidden away for when you get sick is one of the most sensible things you could ever do for your whole family.
Pregnancy is a lot easier to manage financially and emotionally when it is planned by you and your spouse. However, life happens and unexpected pregnancies are as common as sunshine in Florida, so if there is any chance you could end up unexpectedly pregnant at all, it really would be wise to have some money set aside in an emergency fund that will help you to pay for the essentials like diapers and doctor visits, you might have to find other ways of financing the first 18 years of the little bundle’s life though!
No one gets married thinking that they will one day get divorced, but around half of all marriages o end up in divorce and that means that it could well be something that you have to deal with one day. Should the worst happen, it will be a whole lot easier to start your life over as a single person if you have some money in the bank to help you get started. It will mean that you don’t have to wait for the divorce settlement to move out and start building a new life and that can be amazing for your mental health, Hopefully, you’ll never need to use, it but you never know what life is going to throw at you!
12. Kids activities
If you have children, you will know that they cost you an absolute fortune in many ways from clothing to college funds, but something a lot of parents do not consider in terms of financiaing their kids are the various extra-curricular activities that they are going to want to try throughout their lives. Many of these activities come right lots of unexpected expenses from the costs of uniforms to trips and tournament entry fees, so having an emergency fund can really help you to support your children with their interests.
Whether your own or someone else’s weddings can be expensive affairs when you count the cost of outfits, gits, travel, and hotel stays, so when one is sprung on you at the last minute it can be a struggle to find money in the budget to attend. Not when you have an emergency fund though!
When you have a family it is really important that you and your spouse have life insurance policies so that if one or both of you were to sadly pass away, the rest of the family would have a financial cushion to take care of them. However, having an emergency fund can also be helpful because it may take the insurance a while to payout and the last thing loved ones need is to be worrying about money when they are mourning an important loss.
15. Unexpected opportunities
Sometimes in life, we are thrown an opportunity that is too good to pass up, whether it be a business opportunity or the vacation of a lifetime, but many of us DO have to pass them up because we simply do not have access to the funds that would enable us to take the opportunity that is presented to us, When you have an emergency fund, this is less of a problem and you can truly embrace life and do what you really want instead of being held back by a lack of money.
As you can see, having an emergency fund makes so much sense for pretty much every eventuality in life, so time to start saving!