Emergency Fund: What is it, and why do you need one?

Prevent yourself from financial unforeseen.

Stealth Capitalist.

Having an emergency fund is the foundation of a solid financial life. It will give you security in times of economic hardship.

It is a stock of money that you keep safe to use in emergencies, such as being unemployed or sick, for example.

What is an emergency fund?

It allows you to honor your financial commitments, without having to take out loans with high-interest rates or going over your credit card limit.

Importance of the emergency reserve:

Making money takes time, so it's best to determine an amount to put into your reserve on a monthly basis. In addition, it takes discipline not to redeem this balance with superfluous things.

The purpose of the emergency fund is not to be earmarked for some fancy trip or purchase, but to cover basic expenses in difficult times, or unforeseen expenses that squeeze the budget.

If you want to get an emergency fund, let us help you! We've put together some tips that can help you prepare yours, check them out.