Emergency fund is a term people use when they are trying to get out of debt. It is smart to have a good amount of money aside that you consider for emergencies only. You should always have anywhere from $500 – $1,000 set aside for emergencies. Here are reasons to use your emergency fund.
Vehicle Repair
If you have a vehicle more than likely you will have some kind of car trouble. It may be that one day before you go to work you see that you have a flat tire. If this is the case one day, simply change the tire and take it to a tire shop and if the tire cannot be patched then purchase another tire using your emergency fund. Another common repair for vehicles is having a low battery or having to change the starter.
Home Repair
One day you will come home and it will be hot. There will be something wrong inside your home. One repair that often comes up with homes is roof repair and air condition repair. This is also a case where you must take money out of your emergency fund to pay the repair company.
Medical Expenses
One unexpected expense that families have to pay for is medical expenses. Medical attention can be one of your most expensive expenses you will ever have in life because it’s hard to put a price on staying alive. A lot of people go bankrupt because of a medical expense that took the family over the edge financially.
Once you have used your emergency fund for an expense make sure to put that money back the next time you get paid. So do not use credit cards to pay for unexpected expenses, use the emergency fund that you save up for and that will keep you debt free.
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