The Importance Of Setting Up A Family Emergency Fund. Know The Information!

The Importance of Setting Up a Family Emergency Fund. Know the Information! - Do family emergency funds need to be prepared in a fixed budget? If so, when should I start setting up family funds?

Check out the full review in my Finance article below.

The Importance of Family Emergency Funds

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Every family must have different needs. The amount of family members determines the amount of funds that must be spent each month. Not to mention if there is an unexpected event that costs quite a lot.

Therefore it is very important for you to prepare funds on this one.

How to Set Up a Family Emergency Fund for a Precarious Situation

This fund is a fund that is prepared specifically for sudden or unexpected needs in your family. For example, funds for treatment, accidents, vehicles or others. How do I set it up? Here's the explanation.

#1 Separate From Other Funds

You have to understand that this fund is not an investment. Nor is it a child's education fund. Although this fund is prepared for your family, you should be able to separate it from other funds.

#2 Easy to Disburse

Family emergency funds should be easily disbursed. That is, the funds can be obtained immediately when the situation is urgent. You should also be sure to get these funds in cash in a short period of time.

Therefore, you should be able to choose a flexible emergency fund storage instrument. Savings in banks or precious metals can be an option because they can be disbursed in cash whenever you need them.

#3 Number

The number of different family members greatly affects the amount of funds that you have to prepare.Moreover, if you are married, the number of your children determines ideally the emergency fund that you should have. However, these funds are usually 3 times earnings.

#4 Emergency Fund for Singles

For those of you who are single, the emergency fund you have is at least 6 times the amount of monthly income. You can set aside 10% of your monthly salary. If you regularly do this, the ideal amount you can collect within 2-3 years.

#5 1 Child Family Fund

If you are married and already have 1 child, then the amount you should prepare ideally is 9 times your monthly income. This fund can at least connect your life for the next 3 to 6 months.

#6 For Those With 2 or More Children

If you have 2 children, then 12 times your monthly income should be ready to become an emergency fund. If you have 3 children, then ideally it is 15 times your monthly income.

The amount is calculated from each 1 family member given a plan of 3 times the monthly income. In other words, the way to calculate emergency funds is the number of family members multiplied by three.

#7 Source

The amount to be prepared ideally does set aside 10% of your monthly salary. However, to get it does not have to be sourced from your monthly income alone. You can separate it from other sources.

Take from daily commissions, annual bonuses, Hari Raya Allowance (THR) and some other additional income.

Prepare To Anticipate Urgent Needs

Photo by Annie Spratt on Unsplash

In life, future events cannot be known. therefore prepare early. It doesn't matter how much you separate, the most important thing is that you should be able to run it regularly.

Related Video - The Importance of Setting Up a Family Emergency Fund. Know the Information!

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