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.
Education
Most parents limit their education savings planning only to tuition and back-to-school shopping. However, there are many other students's needs that need to be provided for, like uniforms, sports equipment, extra curricular activities, computers, cost of examination and etc. In addition to that, the older the child gets the more unforeseen education expenses pop up. When a child goes to college, parents need to save also for things like fraternity/sorority fees, travel and many others. Therefore, they need to increase their education-related savings. Especially in Dubai, education has been transformed into a big business and education-related expenses are a real burden for parents.
