Emergency Savings Everyone Should Have
Nobody wants to be caught in the midst of an emergency without money. Unfortunately, for many Americans, emergency savings just aren’t something they have readily available. However, it is essential that you save for many different types of emergencies. Although it is possible to have one large emergency fund to be used for anything that comes up, let’s look at a few different emergencies that you should separate money to address.
When you own a house, it can be tempting to lull yourself into a false sense of security. However, houses cost a significant amount of money for upkeep, and a major repair could be thousands of dollars. Although homeowners insurance can cover major catastrophic events, it does not cover all situations where repairs are needed. Keeping a separate fund just for home repairs will ensure that you are able to fix your house as soon as an issue arises.
Many Americans rely on their cars to get them to work. If you can’t get to work, you can’t make money. Therefore, it is essential to have a fund in place to fix up your car, should it ever stop working. In fact, it can also be a good idea to save for your next car before you need it, as a complete loss of your vehicle can be devastating. Although public transportation is available in many places, people who live outside of major cities may struggle to fit it into their schedules. Thus, it is crucial to keep cash on hand for a car.
Nobody thinks they are going to be laid off until it happens. Yet, many Americans each year suffer from layoffs that can severely impact their way of life. It is never a bad idea to have a rainy-day fund that can cover several months of lost wages, especially if there are extenuating circumstances that will not allow for unemployment pay. To maintain your lifestyle, try to save at least 3 months’ salary, but preferably 6 months’ to 1 year’s worth.
Finally, medical emergencies happen all the time, and there is no way to know when they are on the horizon. You can anticipate that the older you get, the more likely it is that you will have major medical work done. However, even a child can break a bone, or you may get into a car accident. Be prepared for medical bills before they arrive by saving up money to cover any major medical expenses that you will accrue.
Emergencies come in many shapes and forms. Some are quick and easy to fix, while others are expensive and may last for months, if not years. Make sure you have money set aside for all major emergencies to ensure you are able to live comfortably even in the hard times.
Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.
Ben Soccodato is a registered representative of and offer securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. www.SIPC.org 6 Corporate Drive, Shelton, CT 06484, Tel: 203-513-6000 CRN202203-262395