An emergency fund acts as a safety net, protecting you and your family from unforeseen circumstances where you need cash immediately.  Life can be full of unexpected obstacles; having cash at hand will help you by providing you with more options and preventing you from taking on debt at the worst time possible.   The most common needs for emergency funds are job loss, unexpected medical expenses, extensive but necessary house repairs, death in the family, and car repairs/replacement.  Oftentimes, when it rains, it pours with unexpected issues occurring simultaneously.

You can prepare for financial emergencies which will require access to cash by keeping an appropriate emergency fund.  Ideally this should be cash so that you could access the money quickly in the event of an emergency.   The money should be easy to get via cheque, cashier or ATM machine and incur limited or no penalty for withdrawal.

While the determination of the amount of an emergency fund is dependent upon a number of factors specific to the family or individual (e.g., job security, whether both spouses are employed, the ability to find a new job in one’s field, etc.), in general your emergency fund should cover six to nine months of your typical monthly expenses that are considered necessities:

§  mortgage and/or rent

§  insurance (house, car, and health) premiums

§  transportation costs

§  food

§  tuition

§  utilities

Lastly, here are just a couple of the things to keep in mind with regards to financial emergency preparedness:

-Stay away from turning to your credit card as a source for cash during hardship

-Keep some cash at home to cover very short term emergencies in case the bank isn’t open.

Anthony Curran is an advocate for your financial future who takes a holistic approach to your needs and goals. He will work collaboratively with you to define what success and financial independence mean to you and how best to achieve them. Anthony is well qualified to provide long-term support and guidance on a variety of financial challenges and will help you focus on what you can control. Defining your own financial freedom will help you be more comfortable about retirement and the possibilities of creating the life you want. Whether you are single, married, or raising a family, your approach to financial well-being now will shape your life for years to come. www.lowcostlifecover.ie