With None Being Able To Predict The Future, How To Build An Emergency Fund Is Discussed
Online PR News – 20-December-2010 – – None have the ability to foresee the future or predict the hurdles which lie ahead. This makes building an emergency fund a financial priority. National Debt Relief Program, a free matching service that connects consumers with debt relief providers, discusses ways and means to build an emergency fund.
Building an emergency fund is healthy for a person’s financial well-being, since one is rarely given advance notice of a setback or an accident which will keep one out of work for an extended period. Budgeting for an emergency fund is also a safety net that can save a person from bankruptcy or severe financial hardships in the event of an unexpected change in their income or expenses.
Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if they don’t already have readily available funds in their account for covering any unanticipated expenses. Budgeting for an emergency fund provides financial security because it gives a person funds to fall back on if they become ill, or if they or their spouse or partner loses their job. A person does not want to end up in a situation where they need to purchase daily necessities on credit and end up making payments at 18% APR on groceries they bought two years back.
Budgeting money for emergencies is definitely a better alternative to taking a loan or cashing in one’s long-term investments. If a loan is taken out, there is the additional burden of paying interest. Encashment of investments before maturity means not only will a person lose out on the interest, but also some part of the original investment.
Success at building an emergency fund depends on consistency at saving money on a regular basis, and resisting the urge to dip into this rainy day fund for non-emergencies. This money should be kept separate from the general checking and savings accounts. A substantial part of this emergency fund account should be invested in low risk funds. This ensures that one’s investment does not lose its value in case the money is needed. Also, it should be extremely liquid, to give access to the cash easily and quickly if needed.
Yet if a person finds themselves overwhelmed with personal debt today, debt relief programs are easily and readily available today. National Debt Relief offers a free debt evaluation which can be taken advantage of at their website: