Having an emergency fund is not so uncommon today. Most people meticulously save for things like holidays, retirement and a special personal treat every now and then. What they forget, however, is that unexpected expenses can easily break their bank account and gulp a huge portion of their savings.
Personal finance experts have estimated that it is best to have between 6 to 12 months of income saved for unforeseen expenses. A research by Bankrate, however, has found that only 40% of the people have so much money set aside for emergency even though nearly 50% of them reported that they had at least one unexpected expense in the past one year.
Luckily, unforeseen situations that require unexpected expenses are quite foreseeable. There are five main emergency financial situations that occur most frequently than all the other.
Car Problems
Car owners tend to plan only their budget for petrol and oil changes. That is why when their vehicle needs an emergency repair work, they find it hard to cover it. On the average, one repair costs nearly AED1000. But that price can often be higher and reach up to a couple of thousands. So, setting money aside for such unforeseen expenses is a must. If your car is an older model, you might need to save even more.
