It is important to have extra money tucked away in case of emergency. It gives people the peace of mind and a sense of control over whatever may come, instead of worrying about where to get money from.
Here are more reasons why people need to build an emergency fund:
1. Helps stay debt-free in times of emergency
Staying out of debt starts by not living beyond one's means. Some take extra step by saving enough in case of emergency.
Not having a stash of emergency fund could force people to avail high-interest loans when the difficulty comes. Availing loans and thinking how to pay it back double the burden for people. As early as now, having a buffer fund cushions the impact of an emergency's financial dilemma.
2. Covers unforeseen medical expenses
Even with healthy lifestyle and impeccable diet, accidents and illnesses may happen. Insurance may help with the hospital expenses. However it doesn't cover all types of medical needs. Worse, some aren't prepared even with a single peso to handle the expenses if a medical emergency happened to them.
When the bills pile up and savings have been depleted, an emergency fund can help cushion the impact of having to shoulder the cost. The fund may also offset the cost of missed work due to hospitalization or needed rest.
3. Prevents passive spending
People have the tendency to spend on a spur of the moment, especially during sale, without thinking twice if the products are necessities.
Instead of shelling the extra money on luxuries, it would be better to save it for an emergency fund. Depositing monthly to a separate emergency savings account would later yield enough money in case of sudden loss of income or unexpected expenses.
Preparing for an emergency is not just being practical, it’s being responsible. But how much must be kept as emergency savings? Most financial advisers recommend saving three to six months' worth of salary.
However, some emergency fund accounts are dormant that doesn't earn much interest. Some even have a high maintaining balance.
Good thing ING Bank's savings account high-interest rate can make the most out of emergency fund. With a smartphone, one valid government ID and a proof of address, the digital bank offers a convenient way to open a saving account in the comfort of one's home.
With no debit card, customers are encouraged to set aside their money and to take advantage of the high interest of 2.5 percent* per annum with no minimum balance and no lock-in period. It also allows customers to transfer funds to any bank in the Philippines with no fees.
Customer can deposit to his account by taking a picture of any check issued by any bank based in the Philippines. The check image goes to the same interbank check clearing system. Customers can also transfer funds from other banks to ING via PESONet and InstaPay.
More information can be found on ING Bank's website and Facebook page.
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