The sad truth is that most people don't have any emergencyfunds saved up, and not having an emergency savings accountcan really ruin you if something unexpected comes by. This fundis meant to be there in the event of some catastrophe or financialhardship. It's not a vacation fund, but it can be the differencebetween going broke and staying above water during a financialcrisis within your home. There are a ton of reasons an emergencysavings account might be important.

In the event that you don't have excellent insurance,and sometimes even when you do, something maycome up where you'll need to be able to afford certainmedical procedures. Likewise, getting sick can take awayfrom the amount of time you are able to work, thusreducing your ability to pay rent, car payments, andcredit card payments. An emergency fund, even if itdoesn't cover everything, will help reduce the damage.

Sometimes life is full of surprises! You might believe your home issturdy or won't need any immediate attention, and then the nextday, there may be a refrigerator that doesn't work anymore or adangerous leak in the roof. These are going to cost big money,and if you don't have anything saved, you'll either be out of luckor looking at increasing your credit card debt! The same is truewhen your car seems to be in good working order but ends upneeding a major repair; if you don't have the funds saved, you'lllikely end up stranded or paying more for it in the long run(making your finances even worse).

Should you get laid off, fired, injured, or otherwise haveto quit, you may be compensated in some ways, butlikely it won't be enough to cover the amount of moneyyou're used to. If you are typically getting by on the hairof your teeth with rent and car payments, thenunemployment probably isn't going to cover it all whileyou heal or find new work. Having a savings accountwith 3-6 month's worth of bills is likely to be able tokeep everything floating until your situation improves.

While picking a bank for your savings account, makesure to pay attention to any fees. If you're an impulsespender, it might actually be an okay thing to get anaccount that fines for excessive withdraws, but for themost part you really want to avoid banks that aren'tgoing to help you save.

For example, some banks charge a fee simply for having a savingsaccount. Also, you may have a minimum required amount,meaning if you need every dollar in your savings account, youmight have to pay a monthly fee until you get that amount backinto it (this is often only $50). Additionally, some banks chargeinactivity fees, meaning that if you don't put any money in for acertain amount of time, they'll charge you a monthly fee! You canconsider the interest rates, but they really aren't going to make abig enough difference to justify your decision being made onthose alone. In the end, having some type of emergency savingsaccount can keep you from the poor house. If this means givingup your cable bill every month, then it's worth it!

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