Floods, lay-offs, illness: Why an ‘emergency fund’ can be the difference between tough times and serious financial trouble.
We’ve all watched in disbelief as floods have ravaged areas of Calgary and Southern Alberta. Many families are affected. Some homes and businesses are lost completely. Others require extensive – and expensive – remediation and/or rebuilding. Times like these (among other crises) can stretch the limits of our emotions and finances.
This is where an individual or family’s emergency fund can be a lifesaver, or at the very least—an initial buffer against the financial impact of an unexpected occurrence or need.
The purpose of an emergency fund is to improve financial security by creating a safety net of funds that can be used to meet emergency expenses. It can also reduce the need to use high interest debt, such as credit cards, as a last resort.
If you are a renter with few financial obligations you will likely need less in an emergency fund than a family with a mortgage, car payments and other obligations.
Most financial planners suggest an emergency fund contain enough money to cover at least three months of living expenses. Banks and other financial institutions do not carry accounts labeled as emergency funds; it is up to you to set up this type of account that provides you quick and easy accessibility in times of crisis or unexpected expense.
If, due to the recent floods or another crisis, you are currently facing financial struggles and an unmanageable debt load—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Alberta 310 8888.
You can also visit us at www.gt.alger.ca for more information