Advertiser Disclosure

Advertiser Disclosure: We may have financial relationships with companies listed on our site. We may receive compensation for placement of sponsored products or services and this may affect our decision about who to promote and where to promote them. We make every effort to be authentic and accurate with every article we write.

Retirement Planning

Why You Need an Emergency Fund

Currently, paying off debt is my main focus, but there have been a few different times I was glad I had a “baby” emergency fund in place. One time was when I need to do repairs on my car so I could keep driving it to get to work, ya know so I could keep making money and all. Because of things like this, I can’t even imagine how I lived without one for so long. Now that I have an emergency fund in place and I’ve seen it’s benefits, I am 100% of the opinion that everyone needs at least a little bit of an emergency fund. Here are a few reasons why you should have an emergency fund.

Avoid Further Debt

As I said before, I’m still working on paying off my debt but I am also continuing to contribute to my emergency fund. I know that if I faced an emergency without having an emergency fund in place, I’d have to either put some expenses back on my credit cards, or I’d have to take out a short-term loan from a place like Check ‘n Go. I’m not saying those places don’t have merit, but I sure wouldn’t have to have to use one unless I absolutely had to. Having an emergency fund in place will save you from having to do that.

Give You Peace of Mind

Having an emergency fund in places helps me sleep better at night. My fund is not up to what I would ideally like to see it at, but the higher it gets built up the easier I am able to sleep at night knowing that I am financially secure. I’ve heard before that this worrying is a really a “woman thing”, but I think everyone without an emergency fund should be worrying at night. Having easily accessible cash to pay for unexpected expenses is a must in my mind.

Still Earning Interest

If you shop around, you can still earn at least a little bit of interest on the money in your emergency fund. I used to keep mine at my traditional brick and mortar bank, but when I realized I could earn more interest elsewhere, I decided to move my emergency fund to a different institution. The interest I earn on my emergency fund doesn’t add up to much, but even a little bit helps! Besides, the point of an emergency fund isn’t to use the account as a money-making investment, it’s simply to have cash on hand for an emergency (duh!).

Emergency funds have a lot of pros and not a lot of cons, and I think it’s important for everyone to have at least a little emergency fund no matter your age, marital status, if you have kids or not, your financial situation, or home ownership status. Of course, some of these factors do need to be taken into account when you are deciding how much money to keep in your emergency fund, but that’s a topic for another day. 🙂

Do you have an emergency fund? Why or why not.

Photo of author

Erin Thompson

Erin Thompson spent years managing her own blog about budgeting and debt. Because of that, she has great insights not only about managing spending and borrowing but also about running websites profitably. When she's not writing articles for us, she's traveling and looking for new types of wines to try.
Want to Say in the Loop?

Get the latest updates we offer about all things "Money" by signing up for the CashBlog newsletter.

As Seen on

The content on is for informational and educational purposes only. It is not financial advice and we are not certified financial advisors. strives to keep its information accurate and up to date, but it may differ from actual numbers. We may have financial relationships with companies listed on our site. We may receive compensation for the placement of sponsored products or services. We work hard to write authentic and accurate articles.