No matter how well you plan ahead or how careful you are, life happens. No one can control everything, and one day you may find yourself navigating an emergency that you—and your budget—are unprepared for. In fact, a recent finding indicates that 40 percent of Americans are not financially capable of covering a $400 emergency expense. That’s why it’s vital that you have a rainy-day fund to protect yourself from such emergencies as:
- Job Loss
This is the number one reason you need an emergency fund. A sudden loss of employment may be a surprise to you, but your recurring bills won’t just stop coming. From major expenses, like rent or mortgage payments and car and student loans, to everyday necessities, like food and gas, your expenses will pile up very quickly when there’s no paycheck to cover them. A good rule of thumb is to have enough savings to cover three to six months’ worth of bills, but more is always better.
- A Major Health Expense
Regardless of how much you pay for health insurance, there are always going to be out-of-pocket expenses you’re responsible for. Whether it’s specialist co-pays, a high deductible, emergency room fees, or procedures that aren’t covered, medical bills can overwhelm you financially. Any amount you’re able to save to offset them will greatly soften the blow.
- Home or Car Repair
Owning property or a vehicle is an important milestone in life, but who is going to pay if something unexpectedly goes wrong? You. Whether it’s a big-ticket item, like a new roof, water heater or transmission, or small expenses that add up, like a leaking dishwasher, overflowing toilet, or new tires, an emergency fund can make handling unexpected expenses easier.
- Pet Care
Are you one of the 95 percent of US pet owners who consider Fido or Fluffy part of the family? If so, you’ll do anything to keep them safe and happy. Basic care like annual exams, immunizations and vaccines, and heartworm and flea and tick medication are probably already factored into your budget, but what happens if they develop an illness or are in an accident that requires expensive treatment? An emergency fund can help keep your fur babies with you as long as possible.
- A Death in the Family
The loss of a loved one is an especially difficult and trying time, and unexpected expenses only make it harder. These can include something as basic as travel costs for airfare, gas, or hotel rooms, or much greater costs for the funeral service. An emergency fund can mitigate the emotional stress the death of a loved one brings.
Now that you know why it’s so important to have an emergency fund you can rely on when life happens, you need a savings account that can help you make the most of it. Suffolk Federal offers a choice of savings account options, whether you’re just beginning to build up your emergency fund or have been saving for years. Open your account today and start saving for tomorrow!