One of my colleague was asking me about some money because he is short of money. When asked why, he said that he had some medical emergencies and thus he has to get some money from his friends and he has also maxed out his credit card. Those friends are asking him money and thus he don't have anything with him now.
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I know he is in bad situation, but let me clarify. He had the medical insurance but the amount didn't came to him from last 2 months, he is still waiting for that money. He had emergency fund but it was exhausted so that means he was financially sound but at that moment he was in some financial problem. Now I could have given him money but I had bad experience lending the money.
But I know a work around. Our office gives loan for emergencies at 0% interest, there is some upper limit and you have to pay it in 3 months. It will be automatically deducted from your salary every month for 3 months. So instead of lending him money, I have told him about this method and he was happy. Because he might get the reimbursement in this month and in the mean time he can pay his friends too from the loan.
So what I have learned from this is that even if you have the insurance you could end up paying from the pocket and no amount of emergency fund is enough if there is a true medical emergencies. And that's why I think having a good 12 month emergency fund or having a good limit on the Ceedit card is worth it. When you have a good limit, you can actually pay from the credit card and thus try to pay well within the due date. My colleague was lucky as he got the zero interest loan and hopefully he will get the reimbursement and he will come in line with his financials.
