What is an emergency account and what are the perks?
An emergency account is a bank account that should be used ONLY in cases of an emergency. This does not include buying the jacket you have always wanted, but an unplanned surgery or an unexpected expense like replacing a fridge. Emergency accounts act as a buffer in times of need, not WANT!
I will help with tring avoid those stressful situations where you may not have enough cash or disposable assets for these pesky unexpected expenses. It looks and sounds dull, and it is but its very important! It’s something you don’t always think about but when you really need it, you will be very happy that you set one up. It’s like a gift to your future self from your present self, at least that’s how I try to look at it.
Here’s a little story about why I needed an Emergency account;
I recently found myself in a situation where I had to have unplanned surgery. Due to the cost and my recent awareness of what my private health insurance covered (which was not a whole lot and certainly not what I thought it covered). I could have really used an emergency account.
I had to evaluate when I could have the surgery and what my hospital options were due to not having this account. This could have all been avoided by having set up an emergency account (which you should all do). As a side note, you should also review your health insurance, again one of those pesky things you don’t want to think about, but your future self will thank you.
Generally, we would suggest you should have at least one months’ worth of wages but where possible and if you are lucky enough to own a rental property, then we suggest to have at least 3 months’ worth of wages. This is to ensure you are financially secure in times of need. You have that contingency plan in place and can feel comfortable enjoying life.
If you are not sure how to get your cash flow sorted, you can always make a time here and chat to one of our cool PW dream team members. They are only too happy to help you out.
So, when that unexpected event occurs, and you are trying to choose between what bills need to be paid. You don’t have to choose, because you have an emergency account and you got this sorted. Now go buy that jacket 🙂