Did you build an emergency fund yet?

Mar 3 

Written By Melissa Houston

Bad things happen to good people, and your emergency fund is set up to protect you against those bad events.

Everyone needs an emergency fund.

Life is full of surprises, and it’s best to be safe rather than sorry.  Having money in the bank when these bad things happen is a form of insurance, it gives you options on how you react to these stressful situations, rather than adding stress to the event.

You’ll need to build up cash in a high interest savings account.  It will need to be easily accessible – but not there for frivolous spending.  

And no, a line of credit or your credit cards are not your emergency fund.  If you can’t save up an emergency fund, then how would you have the means to repay your credit in an emergency?

So how much of an emergency should you build?  It is recommended to have at least six months of expenses saved to cover your expenses.

You may be covered by EI and/or disability.  But be prepared because the income is reduced.

And I can speak to this.  My husband is a diabetic and has suffered complications which has kept him off work since August 2019.  Yes, he is covered under disability, but it took awhile to receive the first payment, and the monthly payments are significantly less than what he made working.  We are now eight months into his sick leave, and have no idea when he will be able to return to work.  This was definitely an expense we couldn’t have anticipated, but are super grateful to have that extra cash to provide security and reassurance that everything will be ok.  It’s stressful enough to go through a situation like this; I can’t imagine what we would have done had we not been financially prepared.

Life happens, and it happens to good people who don’t deserve it.  All you can do is prepare and hope you will never have to use it.

Some people find it hard to have that cash just sitting there not being used – but that cash is working for you.  Trust me.  It is soooo worth it when you need it.

And I truly hope you will never need it.