Indiaunited contest : Theme: Planning for an emergency fund
My response to the @Indiaunited Contest - Theme: Planning for an emergency fund
Life can throw us surprises at any point of time. Emergencies do not come knocking on the door; they come all of a sudden and for that one has to be well prepared. When we are very young we do not realize the importance of it, but as life progresses and you face different situations of life, you learn all of these things.
When me and hubby were back in India, our salaries were just enough to manage our expenses, and do a little saving, so it was always tough to take care of any emergency sudden expenses that would come up. To tackle that from the beginning, we had made it a point to save 10% of our income in emergency fund, which would be separate from our regular monthly savings. So, in this way, when there would be any sudden additional expenses, we were kind of prepared to take care of it. It would happen sometimes that the expense would be higher than our savings. Especially when it would come to medicals. In such a case, we had no choice but to remove money from our regular savings. But then still the extra emergency fund would save us to a great extent.
Whenever there are additional unplanned expenses and we have to dig from our savings or if the entire emergency fund is used up, then for the next few months we would crunch up on all our leisure expenses and save additional as much as we could to cover up.
Everything in life cannot be planned so it is best to prepare yourself for these unknown circumstances which can knock our door at any point of time in life. No matter how much ever money we earn, it never feels enough, and expenses keep going up, so it is very important to plan. Remove the savings and then whatever is remaining money, expenses should be planned around that and it should not be the other way around.
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Expenses need to be planned around and to stay afloat. We can’t stop emergencies from happening and this is why we must be wise to plan ahead so we aren’t caught by surprise.
Yes, a little mindfulness will help us to not be in a helpless situation in times of emergency
I sometimes default to understanding this concept about paying yourself first as a means for building up savings instead of investing. Not having enough savings for when an emergency expense comes around can just lead to selling one's asset which I try to avoid whenever possible.
To be honest, at one point of time in my 20s I had no sense of saving and I would save only after all expenses, which would some times result in to nothing and some times negatives also, but that's what also made me realize the importance of saving before expenses.
Right. Handling expenses before savings does make common sense too. Expenses is immediate, while savings is more so planning for the future. I think overtime the realization changes to prioritising savings and limiting expenses, one does need to be intentional about savings.
Unforseen circumstances are never planned so we need to be fully prepared by saving financially
That's right
To plan for an emergency is very important. In your case you put aside 10% of income with your hubby is a good and wise decision!
It's important to plan these things especially when you have children
You have wrongly discussed a very important issue that every person should gain knowledge about in their life because in an emergency we forget many things, so we should be a little more careful than before and saving funds for emergencies is something that needs to be planned in advance. In fact, there comes a time in every person's life when there is nothing to do, that's when we have to look at those savings. Thank you very much for presenting this block of yours in a very beautiful way.
Thank you. Planning your savings and spendings will bring financial stability
Personally I don't call any savings emergency, and yet unplanned expenses did arise that made me spend all my savings and that made me feel so much angry. I think emergency fund is a good idea
Unplanned expenses are always there. When you go for shopping you plan to spend 100 and you end up spending 200, in day to day life also little unplanned expenses come up. I have a habit of noting it down all so I can get fair idea about how my monthly budgeting I can do
Is a very necessary thing to do i have really learnt something