Newsdelivers.com –
Having an emergency fund is a necessity that everyone needs to have, especially those who are married. In this case, there are several ways to calculate and collect these funds that you can follow.
Building an emergency fund can provide peace of mind because you are able to manage it when unexpected costs arise. It’s not always easy to save a large amount when you have bills to pay, but a few hundred dollars can help.
Although some people say an emergency fund is ideal for one to two months, most financial experts say the recommended emergency fund amount should cover three to six months of necessary expenses.
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It’s a great idea and an important part of any healthy financial plan, but it also requires work to achieve.
What is an Emergency Fund?
Quoting from the Forbes page, emergency funds are funds that will help to continue living and meet mandatory expenses without choosing unplanned loans, excessive use of credit cards, or selling and mortgaging existing assets.
“Emergency funds are important. We don’t know when an emergency situation will come. Like a car tire, we don’t know when the tire is flat, but there is a spare tire, well that’s like finance,” explained Melvin Mumpuni, Founder and CEO of Finansialku.
For emergency funds, you may need to take into account mandatory expenses, namely expenses that are absolutely necessary.
Ideally, mandatory expenses include food and medical expenses, rent, monthly loan installments, school fees, basic repairs and maintenance, insurance premiums and anything else that you think is really needed. Even so, there is no standard definition of what is mandatory for everyone.
Tips for Creating an Emergency Fund
Creating a budget is the foundation of any financial planning. If you are just starting to collect emergency funds, you need to follow these three simple steps:
Record monthly household expenses and categorize them into mandatory expenses and additional expenses. Do this for several months to get an average figure for mandatory expenses. Doing this exercise can also help you record your expenses and filter out unimportant expenses.
Please note that mothers can never predict how long an emergency will occur. So, building an emergency fund that can help you survive for at least three to six months is ideal.
Meanwhile, financial experts suggest single-income families are advised to build a larger emergency fund, often to cover fixed expenses such as rent and monthly installments for a year, and account for at least six months of variable expenses.
In the case of dual-income family members, the amount of savings per person may be lower.
How to Calculate Emergency Funds
Quoting from the detikcom page, in general the minimum need for emergency funds is three times your routine monthly expenses. For example, if every month it costs Rp. 3 million to meet your living needs, you need to collect an emergency fund of Rp. 9 million.
In principle, the more dependents you have, the greater your emergency fund digging factor. This means that the probability of unexpected events occurring becomes even greater. Try using an emergency fund calculator to calculate how much you need according to current conditions.
If you are a freelancer or freelance worker, you should add an emergency fund amount above the general guideline. This is because if you don’t have a job, you still need to meet your daily needs with emergency funds.
Furthermore, if you don’t have health insurance, this factor will also increase the amount of emergency funds needed.
So, those are some things you can know about emergency funds and how to calculate and collect them. Hopefully it’s useful, yes, Mother.
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(asa/fia)
