There are many reasons why you should have several emergency funds. One of the most important is that it will help protect you from unexpected financial emergencies. If you only have one emergency fund, something happens that causes you to need money quickly. You may not have enough saved up to cover the cost. Sure, you can get extra cash by applying for a loan from reputable lenders. But things can get worse if you can’t manage your money. It could even result in debt or other financial problems. By having several emergency funds, you will be able to cover any unexpected expenses that come your way. Today, let’s learn why you need to set aside your money for some emergency funds.

Being a Budgeting First-Timer

If you have just started budgeting, likely, you do not have much money saved up yet. It is perfectly normal. It can take some time to get your finances in order and save money. However, if you do not have any emergency funds, you could be in trouble if something unexpected comes up. Having several emergency funds will help you cover any incidental expenses that come your way. One of the most important things to remember is that life is unpredictable.

Being Self-Employed

If you are self-employed, you know that your income can be unpredictable. You may have months where you make a lot of money and months where you don’t make as much. It makes it even more important to have several emergency funds. If you have a slow month, you will still have money to cover your expenses. Also, if you have a medical emergency or another unexpected expense, you will have the funds to cover it.

Having Medical Issues

And let’s jump to a reason that we’d never want to use our emergency fund but always have to be prepared for. If you or a family member has a medical emergency, it can be costly. If you only have one emergency fund, you may not have enough money to cover the entire cost. Having several emergency funds will help ensure that you have enough money to cover any unexpected medical expenses. In the United States, the average cost of a three-day hospital stay is $30,000. So, it is essential to have enough money saved up in a medical emergency.

Saving for Your Goal

If you are saving up for a specific goal, such as a down payment on a house or a new car, you may want to have a separate emergency fund. That way, if something unexpected comes up, you will not have to dip into your savings for your goal. You can use your emergency fund to cover unforeseen expenses and continue saving for your plan. It is always better to be safe than sorry when it comes to emergency funds. Having several emergency funds will help you cover any unexpected expenses that come your way.

If you only have one emergency fund, you may not have enough money to cover everything. So, make sure to set aside some cash for your emergency fund. And if you can, try to have more than one emergency fund. That way, you will be prepared for anything that comes your way.