When things are going well, emergency savings can seem unimportant. But in addition to your regularly occurring expenses, like rent/mortgage and utility bills, you'll often deal with unexpected costs.
Take a look at three reasons why an emergency savings account is important.
Being prepared
Issues like car or home appliance repair are common occurrences. However, since they do not happen regularly, people often overlook these costs as they create a budget. By anticipating these costs, you can be prepared for these potentially expensive items.
Avoiding debt
Having emergency savings gives you the option of dealing with the unexpected without having to take on debt. Without the cushion of emergency savings, you may be unable to pay regular bills if you face an emergency and are more likely to take on debt.
Having peace of mind
Having emergency savings will give you peace of mind. Even if you can’t save much, a little money set aside may make a big difference when you need it and reduce stress.
To learn more on building an emergency savings, visit our Financial Education Center.
Blog post courtesy of Everfi, Inc.