My Reason To Put Up An Emergency Fund

My Reason To Put Up An Emergency Fund

In my previous post, I shared an episode of ANC’s On the money that talks about building an Emergency Fund. At the time, I already have my plans to put up one. A recent event in my life seems to have emphasized how important it is to put an emergency fund.

Just a week have past (at the time of writing this post), my wife underwent an emergency procedure to remove the dead fetus from her womb. The procedure plus the other hospital bill summed upto more than PHP 31,000.00. Me and my wife does not have that amount at hand. nor in her bank account. Needless to say, I don’t have a bank account… not yet.

Perhaps we are just so blessed that, although, we don’t have that money, there are people around us that we can easily lean on in cases of emergency like this. One is my employer who is always ready to help their employees in cases like this. I was able to borrow PHP 10,000.00 from the company. Probably I could have borrowed more if I were not paying off my previous loan due to another emergency (see related post here). My wife was able to borrow the rest from his cousin who is working at Haiti. Since it was a weekend, we were not able to process the necessary papers to get a discount from Pilhealth, but we’re working it out to get a refund instead.

This just shows the impact of having no emergency fund. In case of medical emergency, I have no other choice but to borrow money from others. The effect of this is, like in my case, a portion of my salary would be deducted to pay my cash advances or loans from the company. This would lessen my monthly income and of course my budget. If it goes on like this, time would come that I’d be borrowing money everymonth just to make ends meet. This is one classic example of having bad debts!

This recent event had me thinking again that I setting up an emergency fund should be on my priority list. Having an emergency fund would mean, I no longer need to borrow money in cases of emergencies. In turn my monthly income and budget will not be affected.

Plan of Action

The first thing that I need to do is to look for additional sources of income so I could pay out my debts and set up the emergency fund at the same time.

 

Related posts.

http://reflectionsby.me.pn/2013/06/an-angel-went-to-heaven/

http://reflectionsby.me.pn/2013/05/emergency-fund-do-i-need-it-do-you-need-it/

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