Why You Need to Invest in an Emergency Fund Today

People consider their 30s to be the prime of their lives – it falls right in the middle of working hard to establish yourself and preparing for retirement. It’s the only decade of your life where you don’t have to think about what the future holds because you’ve already tied a bell around its neck. 

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When you’re at this juncture of your life, it might be difficult to imagine why you might ever need an emergency fund. 

It is a misguided belief that emergency funds are only ever needed when you’re short on funds or when you’re preparing for a possible crisis. Not every “emergency” has to be a life-altering event from which you would never recover. More often than not, what constitutes an emergency might just be a wayward hospital bill. 

Although I do encourage all the readers to always be prepared for the most dramatic situations – I believe prevention is better than cure, sue me – it’s important to note that an emergency doesn’t always have to be a near-death event at all. Sometimes, an emergency can just be a sudden expenditure you couldn’t reasonably foresee. And it is precisely for this reason that you should invest in an emergency fund as soon as possible. 

Your emergency fund will help you to cope with and overcome any sudden financial blows you may face in life. The main goal of investing in an emergency fund is to safeguard yourself against debt. 

Every one of us is bound to face some unfortunate life events that will leave us devastated and in tears. Dealing with emergencies like this is the primary need for an emergency fund:

  • An unexpected medical emergency in the family,
  • Death of a loved one leading to funeral expenses,
  • Losing a job or livelihood,
  • Crisis in the family, among other things. 

Big, life-changing events like these already come with their own set of consequences. If you’re unprepared to bear the cost of events like these, it may become twice as traumatizing and not just for you but for your loved ones as well. 

Going into debt as a result of paying for a dear one’s cancer treatment can have disastrous effects on your family life, your health, and the well being of your entire family. 

However, there might also be some smaller but equally unexpected events that can be assuaged with an emergency fund: 

  • Pet-related medical expenses,
  • Moving from one state to another on short notice,
  • Car troubles,
  • Losing disposable income, among other things. 

If you try to face situations like these with no preparation or planning, they will add to your debt. 

While these incidents might not be major enough to tip your life into total disarray, they can affect your finances badly enough that you might have to cut down on certain expenses you were able to easily afford before. This could lead to a shift in lifestyle, and such changes can be quite hard to adjust to, especially if you have children in your family. 

If you’re wondering whether to start investing in that emergency fund now or two years later, my advice would be to start as soon as you can. Like I always say, it is never too early to plan a safe, secure, and hassle-free future.

What is a Retirement Fund and Why You Need One

Retirement planning

We work every weekday to earn enough money for ourselves and our priorities. We pour our blood, sweat, and tears into our work so that we can secure a future for ourselves and our family.

So what happens when we cannot work anymore? 

Who pays for our expenses when the income stops? 

Retirement funds are set up precisely so we can retreat from work after a certain age and let our savings pay for our spendings. 

Retirement funds, or pension plans, can help us maintain our standard of life even when we can no longer manage to go to work. It is essential to take note of your net income and your expenditures in order to figure out how much of your current income you can invest in your retirement fund. 

You Can Spend Your Retirement Years in Peace

Human beings typically find it difficult to work once they have entered their 60s. The body becomes weak, and it simply doesn’t make any sense to put it to work every day. However, retirement does not mean that you should not be able to live in your own house, take care of your loved ones, and pay for your own habits. 

Having a retirement fund would mean that you get to live your life when you’re in your senior years with the same luxuries and the comfort as you do now. Being able to maintain the standard of life you’re used to now post-retirement is of utmost importance, and in order to do that, you need to plan ahead of time.

A retirement fund is the only thing standing between a retired person and poverty, and its need or significance cannot be stressed enough.

You Will Be Able to Afford to Indulge Yourself Even When You’re Not Earning

Pension plans are not merely about survival; they are also about living a dignified life, full of pleasures and good times. Just because you’re retired does not mean you shouldn’t have any fun. Investing in a retirement fund now will let you fulfill your desires when you’re retired, and you can live a happy and content life by depending on the fund.

If you want to have the ability to indulge yourself when you’re retired, it’s never too late to start investing in pension plans now.

You Will Be Prepared for Emergencies in Your Old Age

Disasters don’t discriminate between the young and the old. Any calamity may befall us at any moment in time. While you’re earning money every month now and can manage to pay for huge, unexpected expenses without running into debt, this might not be possible when you’re retired. 

If you have a generously large retirement fund to rely on, no matter what tragedy you face, you can do your best to fix it without worrying about bleeding money.

Final Thoughts

If you’re convinced that you need to start investing in pension plans, you can start by doing some research on services that will let you invest in one and then go ahead and invest in one that you think you can trust.