villageflowers21 - The habit of saving is an activity that is usually carried out by people, especially in Indonesia. Even when I was a child, my parents taught me to save.
The money raised is constantly being used to achieve various purposes. So, if we need it or are in urgency, we have prepared it well in advance.
We will discuss this habit in more depth with the importance of an emergency fund. What is an emergency fund? Should everyone have it?
Know What is an Emergency Fund
An emergency fund can be said to be an amount of money that is intentionally reserved by the owner which is intended for sudden or urgent needs. Many people misinterpret that emergency funds are the same as savings, even though this is wrong.
It's true that both save money, it's just a different purpose. So we must have savings for certain purposes and emergency funds for urgent needs. Therefore, it is important that people before having savings must have an emergency fund.
This is because we do not know exactly when the emergency funds will be used because it is urgent and sudden. Like the previous pandemic, people should not panic, because they already have an emergency fund.
On the other hand, those who do not have an emergency fund will make a loss in their lives because they do not have a source of income.
How Much Emergency Fund Is Needed?
The public certainly does not know for sure, the amount of the emergency fund. Is it the same as savings or different? Or like what?
An emergency fund is better in size with one's mandatory monthly expenses. Even each individual has a different amount of emergency funds. An emergency fund can be created with an amount of 3-6 times a person's monthly expenses depending on their individual needs.
Many methods are used to save money that is used as an emergency fund. This is done by setting aside and dividing the income into several expenses and investments.
Divide income into necessities for monthly expenses, emergency funds, investments, and savings. This can be useful so that people can manage their finances well later.
Therefore, an emergency fund must be created so that life can run well. Because in truth, humans can only plan without knowing what will happen in the future.
For that, we need to plan for our financial future by investing. Meanwhile, things that we don't want can't be avoided and the importance of this emergency fund has been prepared beforehand.
0 Comments
Post a Comment