An emergency fund can best be described as a buffer between you and a disastrous or unpredictable financial situation. It is that little extra in the bank saved away for a rainy day to help alleviate the stress of losing your job, crashing your car or an unexpected bill. Having this sort of safety net is essential to keeping things together during a financial crisis that may arise, giving you peace of mind.
Creating a financial buffer means that in your time of need, you do not have to go out of your way to keep yourself afloat. You can feel comforted in the knowledge that you have savings built up to protect you if the worse comes to pass. Besides, who else is better to watch your back than you? After all, if you cannot rely on yourself than who else can you trust?
Saving up for a buffer means that you become more aware of your cash flow. This means that you will find out where your money is coming in, out and what you spend on so you can identify where you can save more. It also means that you are less likely to spend on credit cards.
With your buffer in place you are secure in the knowledge that no matter what happens, you will not fall into further debt. Sure, you may use up some of that reserve but you will not have to cover any costs with a credit card risking your credit rating and possibly landing you in more debt.
Sometimes you may not have the time or the ability to create a buffer. It can catch you unawares before you have had the chance to build up that reliable emergency fund and so it’s times like these you can consider a short-term loan.
Moolr can provide you with flexible short-term loans to match your needs up to a lender that will suit you. Click here to find out what we can do to help you solve your financial situation.