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You Need An Emergency Fund – Have You Set Up One Yet?

No matter how careful you are and how many contingency plans you have in place, there will always be a time when you will feel that life has caught you with all ends up. This is when you will most likely miss having an emergency fund.

Emergencies often happen when you least expect them and when you are least prepared for them. This is one reason why you need to always nurture an emergency fund to cross you over any hardship or curve- ball that life may throw at you. What constitutes as an emergency?

1. Sudden illness that needs prolonged or highly specialized medical care/ medicines/ medial attention overseas
2. Death in the family
3. Accident of any one or more persons in your family
4. Loss of job
5. Loss of property due to theft/ accidents/ any unforeseen circumstances
6. Car trouble
7. Marriage of children

And many other things that pop up when you least expect them. The key to stay on budget is having stand-by funds for these emergencies. The moment you are faced with a scenario like this, you should not have to derail your life to meet the financial obligtion.

What Is A Good Emergency Fund?

Do not for one moment say that you have nothing to save. This is not true. This is the first thing you should address – your perception of your financial capabilities. You can always put something aside. Start with 10% of your earnings and try pushing it to 30-35%. You will be amazed what only 10% set aside can do to your finances in a few years. Aim to set up a “corpus fund” that should manage your basic expenses for – initially – three months and go on building it until this fund can financially sustain you for a year or longer.

Make Your Emergency Fund Work For You

Money saved that is left lying in the bank is dead money. Do not allow it to languish in your savings account. Learn to invest your money into funds that give you the highest returns while it exposes your investment to the lowest market risks. Check out mutual investment funds; real estate; stock, etc. Do not limit yourself by a lack of investment experience.

Use the services of a financial expert if you feel the need to; for this is a vital part of your financial self-sufficiency and a foolproof method to staying debt-free.

How Your Emergency Fund Protects Your Credit Score

Your credit score is a numerical interpretation of how responsibly you manage your finances. The most important thing about your emergency fund is that it prevents you from taking any type of desperate impulse loan when you find yourself going through an emergency situation. This is your best back up plan and source of finance.

Another very important plus you will gain from having an emergency fund is that you have a stand-by saving account that is in addition to your basic savings account that you have set up for say retirement. Often, if you keep at it, this emergency fund will grow to a very impressive amount giving you not only financial security but also a factor that increases your credit score exponentially. Lastly, if you have an emergency fund in place you will be financially confident to take advantage of reasonably risky decisions (as in leaving a not-so-conducive job/ launching a business, etc) towards creating a better life for yourself.

 

5 Sources for Financial Aid From Government

There are many Government assistant programs designed to lighten the financial burden of US citizens who are economically challenged. This is essentially free money and it is available to anyone who meets the eligibility criteria. Often such aid can spell the difference between being crushed by your financial responsibilities and being able to survive long enough to change your financial situation. Below you will find several government subsidizes programs which can help you cross over your current financial burdens. If you meet the eligibility criteria it would be worth your while to utilize these services:

1. Free Phones and Services – The USA Government has partnered with two reputed and well known phone companies- SafeLink Wireless [https://www.safelinkwireless.com/EnrollmentPublic/home.aspx] and TracFone Wireless [http://www.tracfone.com/] to provide free phones and cellular service to 1 million income eligible citizens.

2. Free Cell Phones and Talk-time – Assurance wireless [http://www.assurancewireless.com/Public/Welcome.aspx] offers a free cell phone and a monthly allotment of 200 talk-time minutes. Visit their website for more details.

3. Free Medical Services [http://www.freemedicalcamps.com/] – This is a superb source of medical facilities that provide free medical care and dental treatment to low income and/ or homeless families and individuals. Some of these facilities specialize in certain afflictions such as AIDS, HIV, etc. Some of these facilities charge a small donation/ fee – but that can often be as low as $20. You will also find on this website other sources that provide free or heavily discounted entities and programs such as Government Health Departments, religious bodies, etc.

4. Home Repair Assistance and Grants – There are a number of Government organizations and affiliated ones that extend assistance for home repair and/or grants to moderate and low income families. Here are some that may be of interest:

a. US Department of Housing & Urban Development – Offers two programs - the Community Development Block Grant Program and the HOME Program. These were designed to help low to moderate income families repair their homes.

b. USDA Rural Development – This is an organization that offers support to small communities, i.e. under 10 thousand people. This program is focused on people who live in rural areas and need funds to make their homes habitable and safe.

c. Department of Veteran Affairs – There are two programs offered by this department which help disabled veterans live a more qualitative life in their own homes. The programs assists by adding ramps and other aids that would enable veterans to live an independent life.

5. Support to meet heating expenses – The USA Government offers financial assistance to low income families to pay their heating bills during the winter months under the Home Energy Assistance Program. You will need to apply during the fall to be considered for this program. Low income families are eligible for this program whether or not they are American citizens.

The list does not end here. There are plenty of similar resources that Government and non-government organizations have lined up for people who are in trouble with their finances. Be assured that there are alternatives for you when you have reached rock bottom and help is often just a few clicks away. The trick is not to give up. There is no shame in seeking out help to support the needs of your family. If you find yourself facing financial difficulties, with no savings to fall back on, you are in deep trouble unless you can find alternatives. No matter how desperate your financial outlook appears to be, there is always a place to go for help. Remember, you will always have a way out, provided you are willing to search for it.

 

Resources

The Credit Repair Organizations Act
The Fair Debt Collection Practices Act (FDCPA)
Fair Credit Reporting Act (FCRA)
Consumer Credit Protection Act
The Fair Credit Billing Act
The Equal Credit Opportunity Act (ECOA)

 

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