HOW CAN PLANNING AN EMERGENCY FUND SAVE ME FROM DEBT AND BANKRUPTCY?
Planning an emergency fund helps cover unexpected expenses, so you don’t have to go into debt when things come up.
If you do not have an emergency fund and the unexpected happens, you must pull money from your other savings or investments to cover the costs. Then, this puts you behind your financial goals.
If you do not have additional savings or investments, you’ll be in an even riskier financial position when trying to cover an emergency expense. If you rely on a credit card, payday loan, line of credit, or cash advance, you may struggle to pay it back. High-interest rates can drive you further into debt. If the debt continues to grow, bankruptcy may be the only option.