the amount of money you must have. The best way to “keep” this type of savings

Friday, August 5, 2022, 11:30 a.m

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24470 readings

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Life happens day by day and it’s hard to predict when or how all kinds of “surprises” will come. Despite this fact, extremely few Romanians could cover an emergency of 1,000 euros with savings.

Ziare.com explains in the column Your money what is the “Emergency Fund” and what is the value it must have.

Your monthly income may be reduced, you may not have enough or you may lose your job and you may not find a new job as quickly. As a result, you may find it difficult to pay your bills or cover your contingencies.

Thus, we can say that “the emergency fund is an amount of money that you can call upon when an unforeseen situation arises such as a medical consultation, a flood in the house that requires important repairs and others.

The financiers are of the opinion that the amount from the emergency fund should cover at least three monthly net incomes”, according to cec.ro.

Having a financial backup to fall back on when “life happens” means you won’t necessarily have to rely on a loan or rack up debt to solve your situation.

According to a surveyrecently carried out, 71% of Romanians did not manage to have such an emergency fund and over 55% would not have money if they faced unforeseen expenses (eg: when you urgently need to take the car for service or it is need to buy a plane ticket urgently.)

CEC Bank specialists point out that we should not confuse the expression “urgency” with strong desires such as those for the purchase of a new TV, the latest phone model or a much-dreamed-of trip. It is very important that the money collected in this way is used strictly for emergencies.

Examples of situations in which the emergency fund is used

• an expensive medical consultation for someone in the family, which cannot be postponed;
• a repair in the house – whether a pipe broke or the electrical panel burned… etc;
• car repair, which may have a broken windshield, brake or clutch problem, etc.;
• job loss, especially possible in times of political and economic instability, when certain businesses go bankrupt or others downsize. An emergency fund can be used until you find a new job.

How do you keep your emergency fund?

You can keep the money in a current accountin one savings account or in one deposit.

The advantage of the current and savings account is that you can always access the money, while in the case of deposits, if you liquidate them before the deadline, you will lose interest.

CEC Bank it teaches you to be responsible with your money!

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