Page 69 - Book2E

appliance repairs, or loss of employment are unexpected occurrences in life that hit us hard from time to time. That’s why it’s so important to save for emergencies.
According to America Saves, a
nationwide coalition of nonprofit,
corporate, and government agen-
cies that helps individuals and fami-
lies save and build wealth, building an
emergency savings fund may spell the
difference between those who manage
to stay afloat and those who are strug-
gling financially. That’s because maintaining emergency savings of $500 to $1,000 at a minimum allows you to meet unexpected financial needs more easily. Examples include:
• repairing the brakes on your car
• buying your child a new pair of needed shoes
• replacing a broken window in your house
• paying for a visit to the doctor when your child has the flu • covering the dental expense of filling a painful cavity
• paying for a parking ticket; or
• flying to visit a sick parent
An emergency fund not only enables you to cover these expenses more easily, it also gives you the confidence and peace of mind that you can cope with these types of financial emergencies. Not having an emergency savings fund is an important reason that many individu- als borrow too much money at high interest rates. For example, with emergency savings, Americans probably would not have to take out $2 billion a year in payday loans at interest rates that average 300% to 500%.
Saving for Major Purchases
The only reason a great many American families don’t own
an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.
—Mad Magazine
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