Life has many unexpected twists and turns that no one can anticipate or predict. You never know when you will be affected by something good or bad. However, you can always prepare for the unexpected by doing a few basic things. One of those things is building a savings, nest egg, or rainy day fund. These financial efforts are helpful because one day it will rain. As a result, there are three reasons in particular why saving your money is always a good idea.
An Unexpected Accident
Accidents happen all the time and they are almost always unexpected. Unfortunately, some accidents can be serious and require you to make major adjustments to your lifestyle. You may have to care for a loved one round the clock. This may require you to take a leave of absence from your job. Without savings, the loss of your income could spell disaster beyond the accident. Your loss of income could result in the loss of your home or car, if not more.
An Unexpected Job Loss
The average company goes through its own ups and downs. If a company is in a slump, layoffs may become imminent to stay afloat. Although you may be a great employee, the economic state of the company may cause a layoff that effects you. Your company will more than likely compensate you on some level. However, it probably won’t be enough to live on for very long. However, if you have savings, you could stay afloat until you find the next job.
An Unexpected Expense
You may run into an unexpected expense that could be either an opportunity or a setback. You may find the home you’d been searching for over a year or total your car and need to buy a new one. Unexpected expenses can be both positive and negative. You may want to buy the home because it’s what you want and you don’t want to miss the opportunity. However, a totaled car would mean that you’d have to buy another one. If you didn’t have the money to cover the expense you could look into getting a special mention loan. However, it would be more financially savvy to have savings to fall back on.
There are no negative factors when it comes to saving your money. Even if you don’t have a particular reason to save, it’s still a good idea. There are so many unexpected events in life that can affect your lifestyle and way of life that helps to create cushion as a defense against life’s unexpected and expected events.