TomorrowMakers

Losing a job, an accident or a divorce- there are a lot of reasons why women need an emergency fund.

Remember how your grandmother always had some money stashed away in a jar or in her wardrobe? Little did you know that she was saving for a rainy day.

More often than not women, especially homemakers, tend to depend on the other members of their family for their financial planning. Thus, they never think about building an emergency fund for themselves. On the other hand, a working woman might be more proactive in making investment decisions, choosing insurance plans, saving for her children’s education but doesn’t consider an emergency fund a priority.

 

This can turn out to be a huge mistake. Here are some compelling reasons for a woman to create an emergency fund for herself:

Job (in)security

You probably read at least one news item every day about layoffs. In the modern age, no matter how big your job is or how attractive your pay package is, one thing you do not have is job security. There is always a possibility that either you or your family member can lose the job without prior notice. If you have a hand-to-mouth existence, such a situation can leave you in the lurch. Thus, it is of utmost importance to control your expenses and earmark a portion of the money to build a contingency fund.

Change in priorities and responsibilities

You may decide to leave your job to take care of an ailing family member or look after your children. In such a case, your financial situation may start looking very bleak. If you have an emergency fund, it will not only help you handle the immediate financial needs but also give you the time to rethink your financial strategy. 

Medical emergency

Life may throw a curveball in the form of a medical emergency when you are least expecting it. While you may think a medical insurance is enough, there may be certain medical procedures that may not be covered by the policy. An emergency fund can help you at such times.

Debt payments

An emergency usually requires a large sum. The sudden stop of cash flow can make your financial situation go topsy-turvy and affect your debt repayment. In such a situation, you can fall back on your emergency fund to make regular repayments. This will also help retain your healthy credit score.

Keeps investments intact

You have a lot of financial goals that you wish to achieve as soon as possible - buy a property, buy a car, go on a holiday etc. However, a financial emergency can crop up at any point. These emergencies would make a dent in your investments. But, having an emergency fund would help you handle the emergency as well keep continuing investing.  

Financial independence

A divorce needs one to be financially prepared. If you are a homemaker with no savings or an emergency fund, a divorce may be extremely stressful - both emotionally and financially. If you are working woman, you may need money to achieve all those financial goals that you had planned to achieve with the help of your spouse. An emergency fund keeps you financially secure until you pull yourself up.

Whether married or single, working or homemaker, it is imperative for every woman to build an emergency fund for herself as an emergency fund can prove to be a good friend in times of distress.

How I did it

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