Sandwich generation, have you got any emergency money? Let's find out its importance and how to prepare an emergency fund when you have a lot of dependents.
The Importance of Having Emergency Money for the Sandwich Generation
Having a backup that can be used at all times is very important, especially when we experience unexpected events, emergencies, disasters or whatever the term is.
The backup in question is an emergency fund. By having emergency money, you ensure a financial support.
Emergency savings can save you from debt, anxiety and stress when dealing with job loss, sudden illness, accidents or other emergencies. Imagine if you lost your job, while you had to support a lot of people. As for parents, they are likely to be more susceptible to illnesses.
"Because the sandwich generation meets the needs not only of the nuclear family, when building an emergency fund it is also necessary to take into account dependents outside the nuclear family," said certified financial planner Annisa Steviani when interviewed by Bank Jago.
According to Indonesia Millennials Report 2022 published by IDN Times, in 2021 the rate of households with elderly members was 29.52%, meaning that 1 in every 4 households in Indonesia has at least an elderly living with them.
How the Sandwich Generation Prepares an Emergency Fund
Given the many needs that the sandwich generation must meet, what can be done to start setting up an emergency fund?
1. Use money wisely
It doesn't mean you can't spend money to buy things you like. It doesn't mean you can't have dinners at restaurants. You can still do or buy the things that you like, it's just that you need to plan better.
You can start by making a list of your expenses. It will be clear whether you spend more money on various wants. Remember, wants are different from needs. If your spending habit is more likely to fulfill your wants, then you can reduce your spending little by little. The money saved can be allocated to savings.
The above also applies when meeting needs vs. wants of the parents. "Communication with parents is the main key. And don't make assumptions first. For example, you shouldn’t assume that parents can't understand or there will be conflicts. Ask parents what are their priority needs. You need to also explain that money is tight, not all their wants can be fulfilled," Annisa recommended.
2. Find ways to increase your income
You can also look for ways to increase income if you feel that your income is not enough even though you have managed your finances well. There are many ways to increase your income, depending on you.
Some people choose to have extra income by working side jobs on weekends or when they have free time. Some people choose to invest so that the money grows over time. There are many investments to choose from, mutual fund investment is one of them.
3. Be disciplined in budgeting
To ensure that there is always money set aside for emergency savings, being disciplined in budgeting is required. Ideally, budgeting is done when you receive your salary or at the beginning of the month. And, make sure there is always money allocated for emergency savings when budgeting.
As stated above, needs are more important than wants so they need to be prioritized. Because emergency savings is a necessity, you need to prioritize the money allocation for it.
Together with Jago and Bibit, We Are Jago at Building an Emergency Fund
Now you know the importance and how to start an emergency fund for the sandwich generation. The next question is, where should you save your emergency money?
You need a place that gives you the flexibility to use your emergency fund when you need it. But at the same time, it can also give you interest, such as the Saving Pocket in the Jago application.
Another alternative is Jago’s Locked Pocket, especially if you often find it difficult to resist the temptation to dip into savings. Despite locking money for a certain period, the Locked Pocket offers flexible locking periods, from as short as 2 weeks. And of course, the interest is higher than the Saving Pocket’s.
If you want to save a large amount of emergency fund at once you can. Jago Deposit is the perfect solution. You can save Rp1,000,000 or more as an emergency fund. No need to worry if an emergency happens and your money is stored in a Deposit. You can withdraw your Deposit immediately at any time without paying any early withdrawal penalties or fines.
You can also have emergency money in the form of mutual fund investments at Bibit to avoid improper use. With the Jago x Bibit digital ecosystem, mutual fund investment is easy, fast and hassle-free. Free top up fees, auto debit and being able to monitor your mutual fund investment portfolio directly from the Jago application are a number of benefits that you can enjoy.
Jagoans who are the sandwich generation, make sure you start building an emergency fund.
