Planning for life unpleasant surprises
JOBURG – Many of us are not financially prepared for an emergency situation, so it is important to have some emergency fund available.
Not all life experiences are pleasant – research has shown that many of us do not have money saved up for unexpected life problems such as car troubles or a kitchen appliance breaking.
You are not expected to predict everything that will come your way but Marlies Kappers, head of marketing at DirectAxis Financial Services said people should consider what type of insurance coverage they can afford.
Events that are difficult or impossible to predict such as your house burning down, a car being stolen, a car written off due to an accident or a long-term hospital stay due to an illness. Kappers’ research has found that many of us don’t have enough saved for common upsets, such as a broken appliance, toilet blockage or sudden car troubles.
“Having money set aside makes it easier and less stressful to deal with unforeseen problems and means you aren’t forced into decisions you may later regret.”
Here are some expert opinions on how to include emergency funding in your budget:
- Starting is the biggest hurdle, try to save at least 5 per cent of your income each month for unexpected expenses
- Open an emergency account, to avoid spending on it. A money market or tax-free savings account are two options
- Don’t stop saving, have enough in your savings account that will cover your household expenses for three to six months
- If you have to spend from the savings account, cut down on non-essential expenses such as eating out and holidays.
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