• Sunday, December 03, 2023
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Set up emergency fund as a defense against unexpected


  There is no doubt that life is full of surprises. Sometimes, you may experience the good side of life and at other times, the bad side.

Emergencies can come inform of job loss, health problem, fire outbreak, death of loved one or even a call from the village concerning the health of one’s aged parents.

The need for you to prepare to handle whatever comes your way is as important as curing high blood pressure.

Experts believe that one of the best ways to face life’s challenges is to be financially prepared with an emergency fund, and to be debt free.

Miriam Caldwell, personal finance specialists said an emergency fund is your basic defense against emergencies. It can help you with everything from home to car repairs, medical bills, and cover stretches where you do not have a paycheck. Insurance is also there to protect you during an emergency. You should have health insurance, home or renter’s insurance, and car insurance. This should cover the basics, and help you to get by if disaster were to hit. A little planning can reduce your stress and make it easier to manage an otherwise difficult situation.

According to her, there are things you can plan and prepare for and then things that come out of nowhere. Part of life is the unexpected. It could be something great, like a job promotion when you were not expecting it. It may be something that is not as good like getting sick or being in an accident. Some things come out of the blue with little warning, but you can be ready for emergencies through planning. Financial planning will not stop the situation from happening, but it will make it easier for you to get through the situation, because you will not have the additional financial worry of coming up with the money to handle the situation.

Olufemi Babajide, chairman of the National Association of Microfinance Banks (NAMB), South West zone said creating emergency savings account is the very key because you must have what is called fall back, so that when that time comes, you need to go back there because at that time you already have saved some money.

“When we say emergency, it is a short notice and if there is nothing like that there is no way you can meet that emergency. So I will encourage people to cultivate the habit of saving so that when that time comes they have something to fall back on. If people have that they will be able to have access to more funds. If somebody has a deposit of N100,000, in our sector, I assure you we will do three times that. But is somebody has zero deposit, he will just get zero support. So one of the major benefits is that that fund can be increased to three times when the customer comes”, he said.