Money Management

The importance of having an emergency fund cannot be overstated. To put things into perspective, the COVID-19 outbreak has rendered many Singaporeans jobless.  During these tough times, it pays to know that you have an emergency fund kept in place. This ensures that you’ll at least have some spare money to fall back on when things get rough. What Is An Emergency Fund? An emergency fund is an amount of cash set aside to handle unexpected crises such as medical emergencies, sudden loss of income, accidents and other similar occurrences. You will definitely  have faced some sort of emergency at a point in your life. Having a crisis can paralyze your life for a long time, especially if you had not planned for it financially. An emergency fund will enable you to ride through such challenges and keep you afloat economically, even in the face of a crisis.  It would be best to make it a priority and to include some savings for an emergency fund in your budget. Why You Should Have An Emergency Fund Here are some excellent reasons for you to build up an emergency fund. 1. You Are Planning To Get Out Of Debt If you are working on a plan to get out of debt completely, then it would be best to build up an emergency fund that you can use whenever you have a crisis. It will help you to refrain from taking up any additional debt whenever you have an unexpected financial need. This way, you will gradually be able to pay off your current loans. Ultimately, you’ll also get out of debt sooner rather than later. 2. You Only Have One Source Of Income Some Singaporeans have more than one source of income. It helps to cushion them if they happen to lose their primary income source. However, if you have a single source of income, then it will be wise for you to set up an emergency fund. It will help to keep you afloat if you happen to lose your only source of income. 3. You Work On A Contract,