Share:

If you’re not already saving a portion of every paycheck for a rainy day, it's wise to start doing so. From car repairs to vet bills, unanticipated expenses are inevitable. You may not know when they'll arise or how much they’ll be, but your monthly budget probably doesn't account for all the costs you’ll have to cover this year. That’s why building an emergency fund is an essential part of financial planning. Here are some reasons to do so sooner rather than later.

Why Everyone Needs an Emergency Fund

1. Pay Down Debt Faster

If you don't have an emergency fund, you’ll have to take on debt every time an unexpected expense arises. If you’re already in the process of paying off a considerable amount of debt, adding to it over the year will only delay your financial freedom.

2. Meet Significant Milestones Sooner

financial planningPutting aside funds that are explicitly designated for emergencies will prevent you from having to deplete other savings accounts whenever you’re faced with an unanticipated expense. In other words, you won’t have to postpone that kitchen remodel or family vacation if your car is totaled.

3. Provide a Safety Net

There are very few industries that provide job security nowadays. Even employees who belong to unions face uncertainty in the modern world. A critical component of financial planning is accounting for all possible eventualities, which includes job loss. If you were to get laid off, having an emergency fund could ensure your family is taken care of until you find another position.

 

Building a sufficient emergency fund is just one aspect of financial planning. To determine the optimal strategies for achieving your goals, turn to Stephan and Associates Wealth Management in Xenia, OH. This full-service wealth management firm is committed to helping clients secure financial freedom and can assist with all aspects of financial planning. These include investing wisely, retiring early, and protecting loved ones after you’re gone. To start devising your financial planning strategy, call (937) 374-2002. Visit them online to explore their services.

tracking