Why an Emergency Savings Fund is so Important


The emergency savings fund is an amount of money that each of us should have in order to use it emergency situations. What should you do, for example, if you have a medical emergency or if your car is broken? Such expenditures are unforeseen in the monthly budget, and in order to cope well with them you must have a sum of money that you can only use in emergency situations.

This emergency fund should have the amount of monthly spending for a minimum of 3 months, but if you can save the cost equivalent for 6 or 12 months, the better. Thus, such undesirable situation like you remain jobless, you may be looking for another job without any stress, because you allow yourself to cover your expenses for the next few months from the emergency fund.

How to build an emergency fund?

First of all, to be able to make an emergency fund, you have to develop your habit of saving money. If you currently live from one month to the next and have planned your salary before you cash it, it means you have to improve your money management to make it spend less than you earn and start saving.

In order to be able to save the desired amount in the emergency fund, the best solution is to automatically direct from the account where you cash your salary to your special savings account for emergency situations. If during the process you receive a salary increase or a bonus, you can also direct that amount to the reserve fund and thus you will save the desired amount more quickly!


The money you keep in the emergency fund must be easily accessible, but not your day-to-day arrangement so that you can use it for purposes other than the one for which it was saved. That’s why the best way to keep this money is a savings bank account or investment account. So you do not have the money in the house so you can always turn to them and do not put into complex financial instruments that you should sell if you need them. A savings account gives you the flexibility to access your money anytime, but at the same time you cannot access them directly from the card in order not to spend them daily.

What are the advantages of an emergency fund?

  • In case of unforeseen situation, you will be able to cover the expenses in this fund without having to borrow from your family or friends;
  • You have no stress because you know that in the event of unforeseen expenses you will be able to cope with the situation;
  • It allows you to make decisions without being financially constrained.

The most important aspect of the emergency fund is not to use it for anything but unexpected situations from which you could not go out otherwise. If you were forced to use this fund, you will have to fix it as quickly as possible to return to the original situation. Even if at first it will be harder for you to do this effort with little will and discipline, you will be able to benefit from having a financial safety net all the time.

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