Save an emergency fund to protect your family financially

Protecting your family’s finances is one of the biggest priorities that most of us have. However, it’s easier said than done for most people across the world, as basics such as food, water and education come first when money is scarce. Getting health or life insurance isn’t treated with as much importance in the Philippines as in other countries largely due to cost, which is scary.

insurance

Without insurance, you might wonder what to do if the head of family became seriously injured and where to turn to for help. In some countries, services on offer at Nowinnofee.net might be useful, but aren’t so over here, and government support in the form of benefits is minimal at best. This leaves people in the Philippines with two options: buy an insurance policy for your family or start saving for an emergency fund.

What is an emergency fund?

Reading articles about financial freedom, I learnt about these funds, and the difference between them and normal savings funds. The main one is that, as the name suggests, they’re for emergencies, when something goes wrong like injury or severe illness. Our family already has a savings fund, where we put money aside for holidays and home improvement, so we already know how to save money.

You could use the fund in the event of an accident, when you need to pay for medicine or healthcare, as well as other basics like food if
you have to leave your job. The fund is useful if your family doesn’t have health insurance.

How to save for an emergency fund?

This can be difficult. As we already save money for holidays, and just spent all out money on our summer vacation, we have to start over again. However, this means we can look at what we can save. We look at what we spend money on, and try to cut costs and use whatever’s left to put into the emergency fund.

Ideally, you should know how much you want to save. Just to be sure, you should save up at least three months’ worth of expenses, although if you can manage it, save up six months’ expenses. At the moment, we still haven’t saved for one month yet, but we’re making progress. Next week, we’ll look into how you can ‘pay yourself first’ as part of our Budget101 series.

How do you protect your family financially?

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19 Responses to Save an emergency fund to protect your family financially

  1. anne lei says:

    i am already putting some emergency funds. just like you, i read that this is essential for financial freedom.

  2. anne lei says:

    i am already putting some emergency funds. just like you, i read that this is essential for financial freedom.

  3. hopefully, I can start putting up an emergency fund in the future, but with extra expenses I am currently dealing with saving seems impossible at this point of time :(

  4. Maricel says:

    An emergency fund is a need nowadays. Given the volatile economy, one can never know what’s going to happen financially. Once you have an emergency fund set up, you know that in the event of any financial problem, you don’t have to resort to going to loan sharks. For me, personally, if you have a family, set up an emergency fund of at least six months to a year of expenses.

  5. i totally agree with you. and i remember a saying, save first before spending. :) we dont know what will be our future, and its better to be prepared than not.

  6. Mom Michelle says:

    Oftentimes I get confused between savings and emergency fund. Now, I see the difference of both and the importance too. Looking forward to your post on Budget 101. :-)

  7. Mona says:

    Earlier i got a phone call from an insurance company, well i guess this is different from an emergency fund and i think i should consider this one, it is important to have this because we never know what will happen to us!

  8. I bought an insurance and a lifetime plan in case of emergency. The concept of emergency fund looks promising to me and maybe I can save some money for it.

  9. January says:

    I had bought an educational plan for my son, but had not get an insurance for ourselves. We only have our savings but after reading this I should set aside an emergency fund too. :)

  10. we also have our emergency fund. actually we always find reason to save up. i am such a penny pincher.

  11. This is a great advice to ensure financial stability.

  12. Raven Knives says:

    Great finance tips! It is important to save up and have money for emergency.

  13. Chinmay says:

    Practical advice.

  14. Rose says:

    I’m trying to start one too. Baby-steps, so I’m only doing 10% now. Hopefully I can increase it within the next few months. Now that we’ve achieved all our gadget lusts… it’ll be much easier to save up for an emergency fund.

  15. Shadz says:

    I may have to put up an emergency fund then soon. OMG, I need a raise.

  16. Vera says:

    Its definitely important to differentiate what you’re saving for – vacation, a big purchase, or for emergency. It is my intention to keep building my emergency fund and if i need to save for something i want to buy, it will be a different savings too.

  17. Marie says:

    It would be nice if the tax citizen pays go rightfully to insurance and maintenance of public facilities…sayang talaga, di naman need kumuha ng private insurance dahil pwede naman ang government magsantabi nun! :(

  18. Sumi says:

    I think my parents save up an emergency fund too. It’s always nice to have some money to spare when something unexpected comes up. Better na sobra kesa kulang, diba? :)

  19. Taylor says:

    An emergency fund is really important. I’m trying to build mine up.

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