When I was a kid, my grannie used to tell me stories about what it was like to live during the Great Depression. She said that she was lucky. Her father was the minister in her small town, and since people didn’t have money to tithe they donated food to her family, so at least she and her siblings never went hungry. But she told me one day, when making some soup stock out of the remains of a chicken carcass, that she learned at a young age to use absolutely everything and waste nothing, which she followed up with, “Now eat your peas!” Grannie knew how to get to the heart of the matter.
Today we are not quite so bad off. Although unemployment is high and many have lost their homes to foreclosure, at least there are public services in place to ensure that people need not starve. And the Great Recession, as this extended economic slump has been called, is unlikely to do the kind of damage to our nation that its predecessor wrought. At one point unemployment was cited at rates as high as 25% in the United States (and even higher in other countries), so we can thank our lucky stars that it’s stayed under 10% this time around. But that doesn’t necessarily mean that anyone can afford to ignore the situation. And there are several reasons why now is as good a time as any to start socking away money in an emergency fund.
The most obvious reason to have money set aside in savings is to cover expenses in case of a job loss in the household. Although many people have managed to sustain steady employment during the recession, no one is really safe. Companies that are doing everything they can to stay afloat have already cut dead weight through layoffs, and the next thing to go will be more essential positions. It’s not that you need to live in fear of losing your job, but a healthy dose of self-preservation couldn’t hurt in these uncertain times. Giving up eating out and going to the movies now in order to set aside some money could mean that you have food to eat and a roof over your head following a job loss.
And there are plenty of other reasons to squirrel away a rainy-day fund. What if you get sick and you can’t work? Your insurance may cover the medical bills, and you might even get a portion of your salary, but you’ll need some extra cash to make up for the rest. Or what if a child is ill or needs surgery? If you have your financial bases covered thanks to your emergency fund you can tend to your sick kid without having the additional worry of how you’re going to pay the bills during the interim. What if you get a phone call telling you that your spouse or teen is in jail? You could certainly find the nearest Minnesota or Illinois bail bonds location, but if you have the money on hand, you won’t have to worry about it.
In short, having an emergency fund could not only make your life easier; it could also protect you in a number of ways. So what are you waiting for? Adjust your budget and start setting money aside in case of an emergency.