Finding a joe with more than $500 in the savings account is a myth these days. Many of the Americans lay their financial dependence on the cash advance loans. People have a different view at such loans, they treat these loans as the emergency fund windows to fulfill the temporary financial needs.
But, how about building an emergency fund just to tackle the issues during the financial crisis, dealing with the problems with the money which is safely deposited in our accounts? Well, many of us won’t do that, but, that’s what everybody must start doing in order to avoid these loan traps.
Why Emergency fund?
By starting an emergency fund, you can deal with almost any kind of emergency needs instantly. This fund will deliberately help you when your car breaks down in the mid-way, or when your kid breaks his arm doing some somersaults, or maybe your old granny is having some health issues and you need to rope in some money from your savings account.
You might be thinking that it is a cakewalk to deal with the momentary problems by taking some loan in installment criteria from some reputable lender, but always be careful, there are worst predatory loans and cash advance traps that were manifested just to snare you. If ignored, these loans, in the long run, will create a massive financial hangover that will take you months or even years to get over. A busted car or a kid in the ER are both emergencies, but so is being trapped in a streak of debts.
The Common Notions of Emergency Funds
If you are wondering about dealing with the above mentioned petty financial issues, all you have to do is start an emergency fund. An emergency fund is a kind of savings box where you drop your extra earnings, the monthly remains after the expenses. You might have heard your parents urging you to start saving money from day one of your professional life. An emergency fund can have both short-term and long-term prospects. Some do it to master the unexpected issues, while many do it thinking about the kid’s school fees in the future or the sum saved to buy off a house for the settlement
With time, the money you save as a part of the emergency funds only earns interest and grows steadily.
How Much Should You Have In Your Emergency Fund?
The CPA and Chairman of Debt.com, Howard Dvorkin opines, “Listening to experts on this topic is like owning a Cadillac, a Honda, and a Kia”. He even adds, “You’ll get different mileage even while you head to the same destination.”
Now, the amount you want to have solely depends on your prospects of the problems. Starting from the car breakdown issues to the medical assistance related ones, it is the kind of situation you have in your mind that denotes the amount you should have. The more it is, the better it will be. While the repairs to your car could run you a few hundred dollars, a surprise hospital visit—even with insurance—could run you a couple thousand.
On the other hand, God Knows how awful your condition will be if you end up losing a job. So, it depends on how expensive your lifestyle is and how long you can do without having a job.
Dvorkin also said, “Some experts insist you need a year’s worth of expenses in an emergency fund, others say three months or six months. I say even a week is progress. I never want to give a hard number, because that might discourage people from even starting.”
Despite thinking too much, you can start having an achievable goal, like $1,000. Put your money in a drawer, lock it and stick a note saying ‘No Trespassing’. If you did good with that little act, then it means that you are doing really well and you should keep doing it more often.
When Should You Start Having An Emergency Fund?
Today is the perfect day, and this is the perfect moment to start an emergency fund. Dvorkin said, “If you don’t have an emergency fund right now, you’re running behind schedule. Everyone who’s graduated from high school needs one because everyone can suffer an accident or an illness.”
How To Fulfill The Emergency Needs Without Taking Out Money From Emergency Funds?
If there comes a moment when you badly need money but do not want to put your finger in the savings, then how can you tackle that problem?
Well, if that is the case, then here at the loanshop, we are all set to assist you. You can have a sneak peek at our lender’s list. We provide genuine lenders who are completely customer-friendly. You can check out the comprehensive details mentioned over and select the one whom you feel like.
Now, as there are very nominal charges on the cash advance loans, you can happily take a step forward to fulfill the need and your Emergency Fund is completely safe.
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