Jago wants to ask all Jagoans: do you have an emergency fund yet? There are many reasons to have an emergency fund. Jago will discuss the 5 main reasons to prepare an emergency fund in this article.
What is an Emergency?
Everyone should have savings specifically prepared for emergency situations. But, what is an emergency situation?
An emergency situation, as the name suggests, is something big that you didn't predict would happen. This emergency situation usually costs a lot of money. If you don't have an emergency fund, it will be more difficult for you to quickly overcome or get out of the situation.
Then, what can be categorized as an emergency? An example would be when you suddenly lose your job. Or, you suffer from a serious illness. Repairing a house can also be categorized as an emergency situation because it costs a lot of money.
Why is It Important to Prepare an Emergency Fund?
An emergency fund can help you get through or survive a difficult time for some time, without you relying on credit cards or loans with high interest, which can put you in debt later if you can't pay off.
Here are 5 main reasons you need to prepare an emergency fund:
1. You only have one source of income
Where do you get your income from? If you only have one source of income, for example, if you work full-time in the office, then starting to save for an emergency fund is non-negotiable, Jagoans.
As stated above, emergency situations are unpredictable and can happen to anyone. What if you are suddenly laid off because the company has suffered financial losses so that it is no longer possible to continue its business?
If you have a large enough emergency fund, you can use it to cover your daily expenses until you get a new job.
The example above is for those who are not married yet. What if you already have a family and you are the only source of income in the household, then you are laid off by the company?
For those who have a family, you may need to set aside more money to save as an emergency fund.
2. You are a freelancer or self-employed
When you have your own business or work as a freelancer, your monthly income may fluctuate, unlike those who work in offices who receive the same amount of salary every month.
As a freelancer, for example, in one month you may not have any project to work on at all. But, if you have been disciplined in saving for an emergency fund, you can use it to meet your needs for that month.
3. You have health issues
Everyone wants to be healthy. However, health problems can get in the way. If you already know from the start that you have a fairly serious health issue, preparing an emergency fund is no longer in question. Over time, you may need regular check-ups and treatments. As we all know, the cost of medical treatments is not cheap.
If you don't have health problems, you can save for an emergency fund to cover health costs when you get older. Entering old age, the body may not be as good and healthy as it used to be. Illness may begin to appear.
4. You have your own house
When you own your house, instead of renting or living in an apartment, for example, you are the one who has to pay for repairs and maintenance costs.
The AC can suddenly break. Or, there are parts of the house that are weathered or leaking. Even the cost of simple repairs such as replacing the AC is not little. So, the best thing to do is to anticipate all costs by having an emergency savings.
5. You just started budgeting
When you just started budgeting, you may accidentally forget some expenses.
The money has been used for other needs. But, if there is an emergency fund, you can use it to cover a number of these missed expenses. When you finally become good at budgeting, emergency funds can be used for other things, as discussed above.
Start Preparing and Saving Your Emergency Fund in Jago Deposit
After knowing how important it is to prepare an emergency fund, now is the time for you to start setting aside money for savings. The sooner the better.
So that your emergency fund doesn't get mixed up with other needs, you can save money in a Deposit. Create 1 Pocket for Deposit and choose how long you want to save your money. You may be wondering how it is possible for a deposit to be a place to save your emergency money? With Jago, very possible. The reason is that you can withdraw your Deposit whenever you need it, even before its maturity date, without any penalty fees. The money in the Deposit goes directly to the Main Pocket. No need to come to Bank Jago branch.
Enjoy how easy and practical it is to save for an emergency fund with Jago. You can download the Jago application here.