Emergency fund -- Is it really important?

Funds are maintained in order to stay safe at the time of unpredictable emergency needs. An important section in the personal financial budgeting is the emergency fund. There are many reasons for which one should maintain an emergency fund. It can be for health treatment purpose or for repairing the house or for its improvement, travel expenses etc.

Many of the above points sometimes are not covered by the home insurance at that time the emergency funds comes in use.  Sudden unemployment is another big factor to raise such funds. Anybody can loose job in this recession market. One should be financially prepared on this situation so that one can cope up with one’s personal expenses till he gets the nest job.

Insurance is a an answer to many of the accidental disasters but few natural disasters are there which are not covered by insurance also. There are some places which are prone to some of the natural disasters on those places the loss occurred for such disaster is not covered. A person living in such places needs to take extra precaution. The emergency funds acts as the monetary precautions in this cases.

One should build up his own way of maintaining the emergency funds. These funds should only be used for the purpose they are maintained for. By keeping some amount of the income aside for a fixed purpose or for a generalized emergency purpose can make the emergency funds. It can be maintained weekly, monthly or daily. There is no fixed pattern of maintaining the emergency funds. A little sacrifice in some of the day to day luxury can stand as a support to the emergency needs of an individual person.

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