Why Have an Emergency Fund?
Firstly, there’s the practical aspect. If something comes up that’s going to cost you some money, you have it available. There’s no need to get out the credit card or go into your overdraft, you can just pay what needs to be paid and top up the fund again over time.
Secondly, it is a huge mental relief knowing that you have a safety net behind you. You don’t need to stress out if you get a large, unexpected bill. You won’t feel anxiety if your car needs maintenance or repairs. Redundancies at work? Not ideal, but you’ve got time to sort things out.
This benefit should not be understated. The positive mental health impact of a solid emergency fund is huge, and it can allow you to feel so much more confident and in control of your day to day life.
