Having plans for emergency funds is good. It is very good, especially for a family man who has responsibilities to cater for. One needs to be always prepared so that at any time such emergencies will come knocking, he will be fully ready and up to the task. Emergency Fund can save a man from shame and embarrassment. It is a defense in times of crises.
Emergency Fund is a good defense to rely on in times of financial emergencies. There are different ways in which financial emergencies can arise. The children can get ill at the time money is not at hand for recurrent expenses. Disaster can strike and demand for immediate attention financially. A loved one can be in financial crises and needs immediate attention. All these are instances in which one could be in need of money urgently.
The #iucontest week 16 is currently on. It is a contest in which we share live issues and experiences together. We have been discussing several topics since the inception of the contest. This week, we are sharing our plans for emergency funds. The contest is here
Generating emergency funds is done through different methods. We have traditional methods which we have learnt from our culture that are used in managing emergency funds. There are also the institutional approach in dealing with the issue. All of these methodologies are effective in making someone financially stable.
Among the traditional methods, we learned personal savings methods. Some of these traditional saving methods are by buying goods (mostly foodstuffs) in large quantities and storing them to sell when the prices go up. This method has been effective in building one's savings.
Another method for doing this is by grouping ourselves into small groups and then contributing money for each other, one after another. These are the contributions, thrifts, cooperatives and many more. It is usually effective among people doing the same business or working at the same office.
The modern methods of financial management are mostly run by financial institutions.
What If The Discipline Is Missing
This is the core of the matter. Maybe it is from this perspective that @indiaunited asked for our plans. If I have no discipline to coordinate my finances this way, it won't work.
Sometimes, it is not as if we are wasteful. It could be that we have financial problems like debts or income insufficiency. When what one earns is not enough to handle the compulsory family expenses, how could such a person start planning for emergency funds?