“Save some money for a rainy day.” It’s advice that we have all heard over and over, throughout our entire life. Why? Well, because it’s very sound advice and is truly something we should all take to heart and be proactive about.
When an emergency comes into your life there is never any warning. It just happens. And if you are prepared for it financially, then you stand a much better chance of addressing it and taking care of the situation much quicker than if not.
So, what are some examples of why it’s so important to always tuck some money away weekly, even if it’s a small amount? Here are some things to take into consideration. Hopefully this will help convince you to start paying attention to this age-old advice.
You Never Know When a Medical Emergency Will Hit
Sometimes we can never predict a medical emergency, from catching the flu to being involved in a car accident. They come out of nowhere and you have little to no time to prepare for them. “Even with full medical insurance, most plans these days have a very high out of pocket deductible that you are responsible before the coverage kicks in,” suggests Darryl Howard of NuWays MD.
Now, while having to just pay the first $8,000 of a $500,000 medical bill is great, you still have to come out of pocket for that deductible. Sadly, most don’t have this available. This is just one example of a real world issue that many are faced with. Medical debt is at an all time high because of this.
Car Repairs or Computer (What?) Repairs
What would happen if your car broke down today? Would you be able to pay for the repairs? Most would have to put that expense on a credit card, and in the end they will end up paying for more money because of the high interest rates.
“What about a computer or cell phone repair? Think about how much we depend on those devices to live our daily life,” explains Chris Moberg of Slumber Search. They are almost as important as our car. So, having them break and not being able to pay for the repair can prove to be highly costly.
Slow Business or Unemployment
If you are self employed and business slows down what would you do? How would you react? They say that all self employed business owners need to have at least 6 months of reserves to cover both their personal living costs as well as the cost to run the business. But, most don’t and if business slows down and they are unable to stay afloat their entire financial world falls apart.
The same is true for those that work for a company. What if they go out of business? They give the same advice, suggesting that someone save at least 6 months worth of living expenses in case they are laid off.
A Market Crash on the Horizon
“The world’s economy isn’t exactly highly stable right now and that has a lot to do with current events around the world. Some experts are predicting a market crash in the near future,” says the owner of National Pool Fences. Nobody knows for certain what that will entail, but it’s always a good idea to be prepared for the worst.
Having some money saved up will put you in a much better position in the event the market does take a turn downward. Preparation is the key, financially, for survival in a down market.