Emergency Funds become one of the posts that must be held in finance, because these funds are very important and will be a source of funds at unexpected times. Then, what exactly is an emergency fund? and why they are so important in our life?
Emergency funds are a number of funds are specifically used to deal with various unexpected condition in life (layoff, disaster,etc) which is only used at certain times and can not be predicted when the fund will be used. The procurement of these funds in finance becomes very important because various emergency conditions can occur at any time.
Emergency fund amount will be usually be calculated based on monthly expenses. In addition, the amount of this emergency fund will also be influenced by the status and number of dependents in the finance itself. Below are the ideal of emergency funds that needed in finance.
1. Single does not have dependents
6x the amount of monthly expenses.
2. Married with no children
9x the amount of monthly expenses.
3. Married with children
12x the amount of monthly expenses.
Maybe you ask why is it so big? how could I set aside that much funds? don't worry you can set aside an emergency fund of 10-20% of your income. If you get a bonus or extra money outside of salary, set aside a large portion of that money for emergency funds. Avoid delaying procurement of emergency funds because if you doing so, can cause serious financial problems for yourself.
I hope this EMERGENCY FUND TIPS can be useful for all of you. thanks
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