Nothing in life is guaranteed. And for those people who live paycheck to paycheck losing a job or some emergency would force that person to make some bad decisions [like cashing out retirement funds] or when pushed to the brink and there are no options . . . get money from a loan shark. It's why when thinking about saving one should start with saving a little money that can cover their living expenses for 6 or so months so that just in case . . . Your thoughts on emergency funds, guys? Should it be separate from your "REAL" savings?
Denis, you pose a very valid question, one that I think we should all ask ourselves. Personally, If I could afford to; I'd have a current account, a savings account and a separate "rainy day" account. Sadly, this isn't something that we can all do because of not earning enough or worse still, not being employed. But there's no way I'm going to a loan shark for anything, that's the worst thing anyone can do!
I think the best way to be prepared in times of emergency is to sign up or get an insurance, because even though you will never be caught in a tragedy where you'd need to have an emergency back up, later on in your life, you'd just get back the money you paid for your insurance in a greater value. I think insurance is a good investment. And since you are paying for the insurance, the money is really secured that it'll go as your back up.
I think everybody needs an emergency fund. They are not only necessary, but they can literally save you. With that being said, I am very sad to say that I have yet not been able to start an emergency fund for myself. I started working three years ago and I still cannot save money. I actually am usually negative because the money I make can barely pay for my bills. Sure, if I was more organized I'm sure I could save some but living by myself it's hard because all of the bills are on me, not to mention live in a huge city where everything is expensive and cost of living is really high. I do plan to organize my expenses better this year and start an emergency fund because i think everyone should have one.
I guess for me savings will always be for any use, whether for emergencies or not, because savings are technically money kept aside to be used to buy something in the future, whether important or not, so I guess it's the same for me. I think grouping savings into sub-categories will make it more complicated.
