25 Reasons to Have an Emergency Fund

25 Reasons to Have an Emergency Fund to fall back on
Thinking you have it all covered?

We live in a “spend, spend, spend” world, but although instant gratification is enjoyable, at some point everything or something could go pear-shaped.

No matter how prepared you think you are, it pays to have an emergency slush fund to fall back on. Once you have paid off your debts, financial experts all agree that you should have enough emergency fund or money stashed away to cover between three and six months of everyday expenses. This might seem a lot, but who knows what’s around the corner?

And just in case you are sitting there thinking you have it all covered, here are 25 unexpected reasons to have an emergency fund.

25 Reasons to Have an Emergency Fund

1. You Lose Your Job

There is no such thing as a job for life these days, and unless you are head-hunted on a daily basis, it pays to have an emergency reserve to fall back on until the right position becomes available.

2. Your Hours Are Cut

In an age of zero hours’ contracts, you may find that your employer slashes your hours and you are out of pocket. Would you be able to pay the bills if this happened?

3. You Get Promoted

Good news, but if the job involves a relocation to a new area, you might not be able to accept unless you have the funds in place to cover the cost of moving.

4. HMRC Sends You A Tax Bill

Hopefully this won’t happen to you, but if the Tax Man issues a demand, it is better not to make him wait for the cash…

5. Your Old Banger Goes Bang

Cars have a nasty habit of breaking down when you can least afford to pay for repairs. If your car is old, be extra prepared with an emergency fund.

Having an emergency fund means you can roll with whatever life throws at you instead of floundering.Click To Tweet
6. You Need A New Car

If your old banger can’t be repaired, it is time for a new car. But new cars don’t come cheap, and if they do, they don’t last long. A decent deposit will make a new car more affordable.

7. Your Dog Gets Run Over

Nobody wants this to happen, but if the worst does happen and you are not insured, the vet’s bill will be astronomical. My neighbour’s dog got ran over when she least expected – so take heed.

8. An Unexpected Utility Bill

Even if you pay the bills by monthly Direct Debit, it doesn’t mean you won’t be hit with an extra bill when the meter is read at the end of the year. Having money tucked away in a savings account could make a big difference.

9. The Boiler Breaks Down

Central heating repairs are a licence to print money for heating engineers, but you can have it covered if you have some money put aside.

10. You Succumb To A Nasty Illness

Taking a few days off work because of a bad cold won’t hurt, but a few months off on Statutory Sick Pay will be disastrous.

11. You Get Pregnant

An unexpected pregnancy will play havoc with your finances – for at least 18 years! At least you don’t have to worry quite so much if you have a decent amount of savings to fall back on.

It’s even worse when you discover you are expecting twins… Double the joy, but twice as expensive and therefore two great reasons to have an emergency fund!

12. Your Child Needs Orthodontist Treatment

The NHS will only cover the most severe of cases, so in a lot of cases orthodontist treatment will need to be paid for privately. Ouch.

25 Reasons to have an emergency fund to fall back on.
13. Great Aunt Ethel Falls Ill

Travelling to visit a family member if they fall sick means time off work and travel expenses – and if they live a long way away, it will be costly.

14. A Friend In Need

If your best mate shows up on your doorstep and needs a place to stay, you might have to support them financially until they get back on their feet again.

15. Your Landlord Puts The Rent Up

Living in rental accommodation is one of the many reasons to have an emergency fund on standby.

16. Your Landlord Evicts You

Landlords can’t evict you without good reason, but they can ask you to leave with notice, and finding a new place to live can be costly. A similar situation is finding out….

17. Your Partner is Cheating on You

Discovering a partner is a cheating scumbag is traumatic enough, but if you live together you will need to have the financial resources to find somewhere else to live ASAP.

18. Your Partner Has A Secret Addiction

Imagine how terrible it would be if you found out that your partner had run up debts in your name to pay for his or her addictions. At least you will be able to keep your head above water if you have an emergency fund.

19. You Need To Escape An Abusive Partner

Starting over takes courage, but it also takes money. Don’t leave yourself in the position where you can’t afford to leave. Instead have your own emergency fund. Just in case.

20. A Last-Minute Hen Party

Your best mate invites you to her hen party, but it’s in Las Vegas. Of course you want to go, but without some savings in place, it’s not a viable proposition and you could end up missing out!

21. An Unexpected Funeral

If a friend or relative passes away unexpectedly, you will of course want to attend their funeral, but if this takes place abroad, it could be an expensive trip.

22. Stranded Abroad

Natural disasters, lost passports, family emergencies… all of these things mean unexpected expenses such as extra hotel bills or the cost of changing flights, which you can cover if you have savings in place.

Having an emergency fund means you can roll with whatever life throws at you.Click To Tweet
23. Identity Theft

Cyber crime is on the rise, so if it happens to you and someone steals your identity, you will need some emergency cash to cover everyday expenses while the bank reinstates your debit and credit cards.

24. Mid-Life Crisis

They say life begins at 40, but whatever age you are, if you suddenly wake up one day and decide it’s time to explore pastures new on a Harley Davidson, an emergency fund will help you “find yourself” in style.

25. Your Phone Needs Replacing

It may sound strange, but you’d be surprised by how many people drop their phones in toilets and down gutters. Unless you have an insurance plan that will cover you, you’ll likely need to shell out the cost for a new one. And smartphones don’t come cheap.

An Extra Reason to Have an Emergency Fund

Still looking for more unexpected reasons to have an emergency fund…

26. Mistaken Generosity

People give things away of value surprisingly often, including expensive vintage items, cash and jewellery.

If your partner has just taken a load of items to the charity shop, including items such as your precious bracelet or a book where you stashed your spare cash, you might need to dip into an emergency fund to recover the loss. You will be surprised how many people this has happened to.

Your Turn

Do you have other reasons to have an emergency fund? Having an emergency fund means you can roll with whatever life throws at you. So If you don’t yet have one, start saving today! And you can start by reading our guide on how to build an emergency fund you can be proud of.

We’d love to hear from you!

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25 Reasons to Have an Emergency Fund

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  1. One reason is to have some money in your emergency fund is to take advantage of a “Once in a Lifetime” opportunity, particularly an investment. As long as you are committed to rebuilding the fund afterward, I think it is perfectly okay to use your fund to get a really good investment deal, like buying into what you know is a lucrative business.

  2. #27: You drop your computer and it doesn’t survive the fall – especially if you use your computer to make money!!

    Terrific list!!

    1. Ouch. That will REALLY hurt! And thank you for taking the time to read this post and leave a comment.

  3. I lived #1 this summer! Went after a dream job and it didn’t work out. Lost my job in June and was unemployed until September! So grateful for an emergency fund!

    1. Thank you for taking the time to leave your comment and sharing your experience with us. This shows how having an emergency fund can save the day. Particularly, in the wake of the economic crisis, where jobs and homes are less secure, it’s important to be financially prepared.

  4. Emily, thank you for taking the time to leave a comment. Having an emergency fund to take advantage of “Once in a lifetime” investment opportunity is a brilliant idea, and we strong recommend not to invest all the money, but to allocate a certain amount for emergencies only as you never know when disaster will hit.

  5. Potimarron says:

    Thank you for this. For me, the emergency fund represents peace of mind, self-respect and choice.

    For a long time I frequently had to borrow money from my parents to cover unexpected expenses (and use a spreadsheet to find out if I could afford particular discretionary spending each month). They were lovely about it, but I felt ashamed each time I asked. Knowing that we can cover most unexpected expenses makes me feel so calm and helps me hold my head up knowing that I helped to save it.
    As for choice, there was a recent essay about the importance of an “F Off” fund (Google it- it’s chilling). An emergency fund gives you choices- the choice to walk away, to take opportunities, the choice to let a matter drop.

    1. I totally agree! Emergency fund is one of the best ways I know to take control of my finances, stay away from credit cards and eliminate day-to-day money worries.

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