Creating and Growing an Emergency Fund (Part 2)
Managing an emergency fund requires great discipline. Before setting up an emergency fund, there is the need to set goals on how and when the fund shall be used. The fund must only be used in emergency situations. The following steps serve as a guide to establishing and growing an emergency fund;
In utilizing the emergency fund, set some guidelines for what constitutes an emergency and stay consistent since not every unexpected expense can be termed emergency. However, don’t be afraid to use it if you need it. If you spend part of your emergency, work to rebuild it.
Think of an emergency fund as financial backup for you and your family in case something unplanned happens. The primary investment objective should be conservation of principal. By starting an emergency fund now, you can avoid serious financial problems in future. Talk to Nimed Capital Limited for advice on how to start an emergency fund.