Playing It Safe: Why is an Emergency Fund Important? We've all had one of those months where the bills and paychecks didn't exactly blend together perfectly, and others are going to have those months more frequently than others. Emergency funds are essentially savings that you can dip into whenever things start to look a little scarce, which is never a bad idea. There are multiple reasons as to why you would want to have an emergency fund set in place, as well as many different options to actually have the fund set up. You could go the legitimate route and actually open up an account, or just keep your very own “shoe box fund”; it's completely up to you. Call me crazy, but I'm really the type of person who likes to be prepared. Whether it be for a zombie apocalypse or a financial crisis, I want to make sure that I'm going to be okay for the foreseeable future. An emergency fund allows me to relax a little more than I usually would, as I always know that there's going to be some money available for those rainy months (no, not days; rainy months!). How Can it Help? Well, for starters, you'll never need to worry about having grocery money when things are tight. You're always going to need food in the house, that's just a necessity that we all have to make use of. When you can't make the rent and buy food as well, you're going to have more than your fair share of problems. An emergency fund makes it so that you're never put in the situation where you've got to decide between the two. That's just one of the many problems that you'll find yourself dealing with when money is tight, the emergency fund could even be applied to things like house insurance or car payments. It's usually the little things that end up requiring the most money, like cable television or even internet; but all of these are common commodities. You might even work online, making an internet connection absolutely necessary! Therefore, an emergency fund really has the ability to keep your business afloat (in a sense, of course). These funds will help you Relax and understand that you're never going to have a “scrape-by” period – all because you planned ahead! You'll still know where the money is coming from, as opposed to looking around for loan places and such When you're getting loans your credit will deteriorate rather quickly if you don't pay them back (in a timely manner) – don't get caught up in the vicious circle Hope for financial freedom You might even need to make an emergency investment of some sort, but have all of your money tied into other assets; all you've got to do is dip into your emergency fund and the investment is made. I'm not the type of person to beat around the bush, having an emergency fund is just all around smart. If you don't have one of your own right now, I would suggest you look into starting it!