One of the things that was highlighted to us when we first became intentional in building our family’s financial roadmap several years back, was to the importance of having an emergency fund. It was part of the financial literacy curriculum that we went through. While we got in that boat later than we should have, as they say, better late than never. This was a milestone for us even as the realization gave us this measure of financial security that we would not have had if we chose not to be prudent to take.
As for emergency funds, experts say should ideally be three to six months of household expenses worth. Given the financial status we had back then, it was a long shot for us to come up with one. Living expenses in the metro is not exactly low, in relation to the purchasing power of the Philippine Peso. This meant it took us a great deal of discipline and will power to get to a point where we were be able to afford an account dedicated for our family’s emergency fund.
Truth be told, getting a hold of an emergency fund is one of the keys to adulting that makes sense. The impact of having this in place for families the world over was made felt when the coronavirus hit early 2020. Especially so that the global pandemic has taken a lot of people back financially, with millions of people losing their jobs. Life’s disruptions have the ability to overwhelm, whether it’s medical bills, unplanned expenses, or the pandemic. Prudence is having some measure of security that financial disciplines like coming up with an emergency fund allows us to have – making financial challenges more bearable.
While this is may be ideal, we must face it that not everyone take to heart the urgency of having an emergency fund in place. It is rather unrealistic to expect that everyone will be able to get this done, with a handful lot who live paycheck-to-paycheck. A report from the Federal Reserve has it that 4 out of 10 Americans struggle to come up with $400 on any given emergency. This does not make it less of a need that warrants addressing. The existence of having an entity where you can get the money you need remains critical. Having access to lenders who are able to give the best rates during financial challenges is important, making sure as well to come up with a plan to pay it off.
After coming out of a financial rut, most people have hopefully learned the significance of preparing for the future a.k.a. “emergency funds.” And while three to six months worth of expense sounds unconquerable, anyone can start off with the bare minimum. The key is to start somewhere, persist and move your way up as you discipline yourself towards financial freedom. Nothing is achieved without some deal of sacrifice.
Even as we continue to grow in this department in our family, we are truly grateful that because we started somewhere, we have since made bank rates work for us and not against us. This goal was once far-fetched, and as painful the discipline can get sometimes, it has become difficult, even unthinkable for us to go back to our old ways. To start somewhere and move forward towards financial freedom is always a good plan.