Are you asking yourself what is an emergency fund and why do you need one? Well, to put it simply, creating an emergency fund may be the smartest financial decision you can make. Ever heard of a nest egg? That’s a type of emergency fund designed to help you overcome financial emergencies, keep your head above water, reach goals, and help your financial future.

In short, you need an emergency fund if you want to reach financial stability and prevent financial troubles in your future. If you are still wondering what is an emergency fund, here are a few questions and answers that can help explain and help you get started on building your own.

Questions To Ask Before You Create Your Emergency Fund

What Should You Know About Emergency Funds?

An emergency fund refers to a fund of money that is set aside to address any type of unexpected financial distress. These emergencies can include the loss of a job, a medical emergency, a vital home or car repair, and much more. Think of an emergency fund as a wide financial safety net. Emergency funds should be put in places where they can be accessed and liquidated easily.

Funds can be established through a variety of means, including an individual monthly saving plan, beginning an additional income stream, or by such benefits as a large tax refund or inheritance. Your employer may also provide automatic ways to start an emergency fund and regularly contribute to it.

How Big Should Your Emergency Fund Be?

After asking what is an emergency fund, you should ask how big should it be. An emergency fund is not one size fits all, and many factors may go into the amount you keep in one. First, it depends on your specific financial situation, including your income, expenses, and the debt tied to your name.

That can dictate how much you can start contributing toward an emergency fund but also how much you need to maintain in your fund. In general, you should have enough in your emergency fund savings to cover about three to six months’ worth of expenses. You may even go up to eight months, depending on your financial state and how stable your job is at any given moment.

Another factor is where you are right now in your life. Those who are single may not need to have as big of an emergency fund as would someone married and with children. You may need to save more if your spouse or partner is unemployed or if you have children who need regular specialized medical care. It may need to be even more if you want to save early to pay for college or require a large retirement fund.

Is Finding Help To Build An Emergency Fund Easy?

Once you create a budget and set some financial goals, the next step is launching an emergency fund either on your own or with a bit of help. You can have an emergency fund account set up with your bank that is kept separate from a checking account or a traditional savings account.

If you’d rather deal with your own money in your hand and not in an account, you can set aside a fund in cash each week or each month. And you may even use one of many apps to monitor your emergency fund progress and adjust based on emergency expenses or your financial goals.

 

 

What Should You Start With For An Emergency Fund?

Once you understand what is an emergency fund, you have to figure out what you should start with to build your emergency fund. First, any contribution to savings or emergency funds is valuable. If you’re in a precarious financial situation, such as living paycheck to paycheck, you will likely have to start small, maybe committing something like 1% or 2% of your income each month to the fund.

Since an emergency fund helps cover major expenses while avoiding credit card debt, you may find your ability to contribute to your emergency fund improve over time. You can adjust emergency fund deposits as you see fit, especially as you pay down debt, refine your expenses, or get a higher-paying job.

What Can You Use If You Need Money Quickly?

Now that you know the ins and outs of what is an emergency fund, it helps to know every option at your disposal if you’re facing a financial emergency right now – like getting a title loan online. A title loan online uses your vehicle’s title as collateral for financial assistance to be paid off over time and is specially designed to move past financial emergencies quickly.

In as little as 30 minutes, you may qualify for a loan of up to $15,000 at Carolina Title Loans, Inc. to help you out with your emergency expenses. All you need to start is to head to our homepage. After you submit the short title loan online form, we will give you a quick call to discuss the required items for the loan and the next steps you need to take.

With a title loan online, we can even come to you if you wish to not come to the nearest SC title loan store. There is no need to visit one of our locations to score a title loan online to help cover your rent. Once we assess your information and we determine if you are approved, you get the cash you need the same day or the next business day — and you keep your car.

Get Started On Your Emergency Fund Right Now

What is an emergency fund? It’s an important part of responsible money management and securing a stable financial future. It is vital you know exactly how to start one, so using these questions and answers can really help you out. And if you experience an emergency before you have your fund, check out a title loan online. Fill out the online form to get started.

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.