Jagoans, have you got an emergency fund yet? If not, do you know that there is a fun way to build an emergency fund?
What is an Emergency Fund?
Essentially, an emergency fund is a dedicated pool of money intentionally set aside and saved to anticipate and handle unexpected expenses or sudden crisis situations. The existence of this savings serves as a financial safety net, ensuring you don't have to go into debt or disrupt your future savings when a critical condition occurs.
After you start saving, the emergency savings will certainly get bigger and this is good. In life, you will experience many events. Some need an emergency fund and some don't.
Having an emergency fund is so important that you can't use it carelessly.
Having an Emergency Fund is Important: Before Using It, Ask Yourself These 3 Questions
1. Is the event taking place really unexpected?
Some people make an event an unexpected case because they forget to include it in their budget planning at the beginning. For example, the payment of an insurance premium that is only once a year and the amount is quite large.
Payment of an insurance premium is not included as an unexpected event that requires the use of an emergency fund. With good budget planning, the use of an emergency fund can certainly be avoided.
So, what are some examples of unexpected events that require you to take money from your emergency savings?
You are suddenly laid off or work hours and wages are reduced by the company due to internal reasons, natural events such as hurricanes that usually never come and serious accidents that require medical follow-ups.
2. Does the event taking place really need immediate care?
Some events do require immediate care or in other words, are urgent. However, some other events can actually wait, for example until the next month, so they don't drain the money in the emergency savings.
Some examples of events that include urgency are a car that suddenly breaks down and a refrigerator that suddenly doesn't work. Both events require immediate care.
The car may be used as the main means of transportation to go to work and to meet various other needs. If the refrigerator breaks down and is not repaired immediately or you don’t buy a new one, all the items in the refrigerator can no longer be eaten sooner or later.
But, huge discounts that are announced suddenly and only last for a certain period are not urgent events. Although you really want to chase the discounts, spending your emergency fund to buy discounted items is not the right way to use your emergency fund.
3. Is the event taking place really important that it cannot be postponed?
There are many things that you think are important and should be done but in reality are not. If this happens, this means that you are prioritizing your wants and to just fulfill your desires, you use money in your emergency savings.
Examples of wants are buying the latest gadgets to look cool or pampering yourself at the spa on the weekend because the day before, on Friday, you got a lot of pressure from work and you just want to 'get revenge'.
An event that is really important and cannot be postponed, for example, is having to buy a plane ticket to another city or country because a close family member has died.
In conclusion, Jagoans, don't use your emergency savings for the wrong purpose. You have been saving money for emergencies. It's a shame if the emergency fund is used for things that are less important, right? Then, when an emergency really happens, you don't have enough savings to deal with it.
Ease of Starting an Emergency Fund with Bank Jago
Bank Jago offers appealing convenience for anyone looking to start or grow their emergency fund. With a fully digital account opening process, you can quickly have a secure and separate place for these important funds. The Jago application allows you to create a Saving Pocket or a dedicated sub-account for your emergency fund, helping you visualize it separately from your daily needs funds or other expenses.
Optimizing emergency fund growth with Bank Jago Term Deposits
Beyond convenience, Bank Jago also provides growth potential for your emergency fund through its deposit products. In addition to offering competitive interest rates compared to regular savings accounts, the Jago Term Deposits are flexible in terms of withdrawal at any time without penalty. You can also directly close the deposit and withdraw funds from the Jago application when facing an emergency. This helps your emergency fund to not only be secure but also potentially grow over time, providing extra peace of mind in facing unexpected situations.
Learn more about the benefits of saving in Bank Jago Term Deposits in this article.
