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.
Home Repairs
Experts have calculated that unexpected home expenses are usually around $1,000 and $5,000. Again, if your home is older, the spending can go even higher. However, such a sum can take time to save up. Still, you should aim to at least set aside enough money to fix one major repair or change one main home appliance.
