Why You Need An Emergency Fund Right Now

Wow, it had been a while since I last wrote a Finance Friday post! I planned on writing one last week, but Yuri and I were both sick which didn't inspire me to write.

This was also a busy week as some of our relatives arrived in the city and we got busy touring them around and generally making them feel welcome. Just last night, they were up late because Mama was teaching them how to bake macaroons and her famous moist chocolate cake:

And my toddler found a new friend in his cousin:

To be honest, I still wouldn't have gone around to writing an FF post if I didn't get to read this interesting post about Jesus having an emergency fund. Interesting, right?

This leads us to the topic of the day: emergency funds.

If I can categorize my friends into those who are financially "okay" and those on the brink of getting broke (I really can't, but this is hypothetical), I'm sure the main dividing factor would be the emergency funds - or the lack thereof.

You see, it is considered "common sense" to set aside some amount of money for the rainy days; however, only a few actually do it.

Unfortunately, even Christians can belong to the "other" category. I have many Christian friends who are buried in debt simply because they don't have an emergency fund. In fact, I'm still waiting for a Christian friend to pay back the debt she has owed me for 3 months now.

Before I proceed, let me clarify that I am not pressuring her to pay me because, praise God, we still have just enough to get by. This is just for illustration. Now, the reason she borrowed money from me for the first place was because of a medical - you guessed it - emergency. She is young and single, was working full-time then and was earning a good amount of money, but in the time of emergency, she had nothing to cover the expenses with.

The debt could have been avoided had she begun an emergency fund prior to the emergency.

I know more people, even Christians, too, in the same situation. I think that's because most Christians have this view that God is going to provide for all of their needs. And that is true! God is really a true and faithful provider. However, I believe that we are meant to be wise stewards of what we are given, and being wise stewards means not spending all of our income as one-day millionaires. I believe He equips us with financial wisdom to save and set aside in order to glorify Him and bless others.

If you haven't considered building an emergency fund yet, please consider this a "sign" and start building one for this reason: emergencies happen and no one, not even Christians, are exempted from them.

You need an emergency fund if you're one of the following:

You want peace of mind.
You want to be prepared for anything life throws at you.
You don't want to be a burden to your family and/or friends.
You have family depending on you.
You aim to achieve a state of financial freedom.
You are allergic to debt.
You're planning to invest your money in the future.
You want your children to feel safe and secure.
You want to bless others by being able to lend money when they need it.
You want to glorify God by being a good steward of his provisions.

Ask yourself this: If you have to shell out even just P15000 for an emergency right now, do you have the means to do it?

Sure, you can always use a credit card, borrow from a friend, or pawn your stuff, but the result is a burden in addition to the stress of the emergency. Do yourself a favor and build an emergency fund that will keep you from getting buried in debt in the future.

Confession:

Both Job and I don't have emergency funds right now. Okay, the accurate thing to say is we both have depleted emergency funds now. That's because Job took out his to begin a small business in the province. The company he works for is on a bit of a shaky ground right now, so there needed to be some backup plan "just in case." So he bought some livestock with his money, and I think it's a good move because the money is growing, and in the case of an emergency, he can easily sell some animals. In my humble opinion, I can tell that he made some wise moves with the provision he's been given.

(I'm also hoping the business grows so that we'll have a steady source of organic meat in the future hee hee)

In my case, I used up what meager fund I have saved up to buy a new laptop. If you recall, a few weeks ago, we experienced 6-hour daily brownouts in the city, and my old laptop had a busted battery with no available replacement. It meant hours of no work, and that's bad news for a freelancer. Thankfully, I was able to save up enough to buy a new laptop without affecting my finances. Even if there are no more brownouts now, I don't regret the purchase because I like my new laptop. Also, wouldn't it be so heartbreaking if there are no more brownouts now and there's no need for a new laptop but I bought it on credit and still have to keep paying for it?

Even if we have depleted funds now, that doesn't mean they'd be forever depleted. This just means we have to start saving up again. The point is that because of the funds we had, we didn't have to suffer so much due to the emergencies we experienced.

This post was just to justify the relevance of having an emergency fund. I hope I was able to nail the point. For tips and how-tos, please wait for my post next Friday!