Before you ask, yes, EVERYONE needs emergency savings. Including you.
I recently turned 24 (woohoo!) and I am proud to say that I have been steadily working on my emergency savings account. My dad is a Certified Financial Planner, and my parents have been instilling this into my brain for years now. Because of this, I went to college with a well-padded emergency fund. The sad thing is, I know people older than me who don’t have $1,000 if needed in an emergency. Maybe, for example, a pandemic such as the one we are in now.
Honestly, there were few instances where I felt grateful that my parents encouraged me to have an emergency fund. Simply put, I wanted the money for myself. I was young and selfish! But I put my selfishness aside. Truth be told it’s been the best financial move I have made. It has been an even bigger blessing since COVID-19. I haven’t had to dip into my account yet, but a ton of people have lost jobs. Sadly, that could happen to anyone. Even mysef. So at the age of 24, I have savings in case I did lose my job or if something really bad happened. An emergency persay.
What is an emergency savings account?
Fair question! Simply put, it’s money set aside for life’s unexpected events. REAL emergencies, not a “I need new shoes” kinda emergency. Breaking your leg, a car wreck, career change, those events. Dave Ramsey recommends starting your emergency fund with $1,000 if you are in debt. That’s not so bad right? Once you build that up, your goal is to have 3-6 months saved up. Then if you lose your job, it is all covered for the time being. So why does EVERYONE, including you, need this savings?
1. Because accidents and bad things DO happen.
In the last six years, I have had a span of unfortunate events that were incredibly expensive. During my time in college I was in two different car accidents (thankfully not my fault). One alone almost cost $3,500. Thank goodness for car insurance!
Also during that time frame, I received double knee surgery due to multiple injuries that I sustained. Doctos told me it needed to be fixed as soon as possible if I wanted a normal life. Oh, and last year I was HIT BY A CAR. While I was in a cross walk too! Again, my awesome insurance covered most of it. Short term, this didn’t cause a lot of stress, and I worked to build it up again. Car expenses popped up as well, but due to the savings it was not as huge of a deal.
2. You could lose your job.
It really isn’t fun to consider or to think about, but I know a ton of people are considering that now. Any of us could lose our jobs. The world is suffering financially, and yet we still have necessary items we have to pay for. Food, rent, medications, water, etc. I recently read an article by the Washington Post saying that over 22 MILLION US Americans have filed for unemployment since the United States went into a state of emergency.
We are all in positions where we face unknowns, and it is important to have those savings incase the unthinkable happens. You need to be able to pay your rent, buy food, pay for your utilities, even if you lose your job. If you have an emergency savings, you can do that. It isn’t meant to last forever, but it does ease the stress for a period of time while figuring out the next step.
3. For your peace of mind.
Wouldn’t it be great to know that if you lost your job, if you got in an accident, broke your foot, or whatever happens, you would be okay? You wouldn’t have to worry about taking care of your kids, taking time off, and you wouldn’t need a huge loan. I have a lot of anxious tendencies so it feels good to me knowing I would be okay. Plus, I have had a lot thrown at me so I know how real it is to need emergency savings!
Take the first step to start your emergency savings. Just $1,000. Start helping your peace of mind and your future today!