Question

Why should creating an emergency fund be a top priority?

Answer 1

An emergency fund, whether it is for business, work, etc. is important, for the future is unknown to us, and we must prepare for any disasters that may occur, whether it be:

Natural disasters, which can lead to a shortage of resources, leading products having a higher price (more demand than supply would drive prices up). Natural Disasters may also mean that access to many supplies of cash is cut off, and larger disasters may see the temporary end to using paper notes.

While emergency funds is a good idea in case of an emergency, it generally is only good up to the point of there being a personal disaster. Any kind of disaster that affects more than one area or even the nation as a whole would destroy the usage of an emergency fund. So while keeping a sizable amount of funds is needed, one should try to keep such that would have worth when the economy has collapsed as well.

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Answer 2

Your next short-term goal should be creating an emergency fund. It is very important to have some money set aside in case of an emergency—for example, medical expenses or an unexpected car repair. To start, $500 to $1,000 is a good goal. Over time, continue to add to this fund until you have 3 to 12 months of living expenses saved. If you lose your job and have difficulty finding another one, you’ll be glad your emergency fund is there.

Explanation:

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