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Team LXME

Reason women should have emergency savings

Ladies, here’s a questionnaire for you:

What would you do in case of a medical emergency?

Ask for money from friends or put it on the credit card?

What would you do if your company didn’t give you a maternity leave?

Leave the job or keep working & stressing?

What would you do if your parents had a medical emergency?

Take an unpaid leave or just ignore the situation?

What would you do if your landlord kicked you out of the house all of a sudden?

Look for another house, take a loan for deposit & shifting, or live on the street?

As women, we face unique challenges and responsibilities. We earn less than men due to the gender pay gap, we take up more caregiving responsibilities and have a longer life expectancy as well. This means that we need our money to last longer despite earning lesser and living longer.

Therefore, women’s financial situation can worsen with age, especially in case of emergencies.

A sudden emergency like car trouble, medical bills, or shifting houses can be costly.

During such difficult times, many women take on high-interest debts like credit cards or loans. This worsens the already difficult situation because the payback amount is more than the original cost.

Having money set aside for emergencies like these creates a safety net to fall back on. In the ever-changing landscape of personal finance, one constant remains true: the importance of emergency savings.

Let’s explore some benefits of emergency fund and emergency money for women:

1. Unforeseen life events

Life can take unexpected twists and turns now and then. A robust emergency savings fund provides financial independence during these challenging times, enabling women to navigate unforeseen circumstances without relying solely on external support.

2. Job market volatility:

Women are active participants in the workforce, but they may face unique challenges such as wage gaps and career interruptions due to caregiving responsibilities. In a volatile job market, having emergency savings becomes a lifeline, offering the flexibility to cope with periods of unemployment.

3. Bridging the gender pay gap

The gender pay gap continues to be an ongoing issue. Emergency savings empower women to bridge this gap by providing a financial cushion. Women can negotiate for better pay, pursue educational opportunities, or even start their businesses with the confidence that they have a safety net to fall back on.

4. Maternity leave and childcare costs

Starting a family comes with its own set of financial challenges. Emergency savings can ease the burden of maternity leave without pay and help cover childcare costs. This financial flexibility allows women to focus on their family’s well-being without sacrificing their financial security.

5. Retirement planning

Women typically live longer than men, making retirement planning a critical aspect of financial management. Emergency savings provide a buffer against unexpected health issues or additional expenses in retirement, ensuring that women can enjoy their golden years with financial peace of mind.

6. Psychological well-being

Knowing that there is a financial safety net in place can significantly contribute to women’s psychological well-being. It reduces stress, anxiety, and the fear of financial instability, fostering confidence in making bold financial decisions and pursuing long-term goals.

7. Flexibility in career choices

Women often bear the brunt of caregiving responsibilities, whether for children, aging parents, or other family members. Emergency savings offer the flexibility to make career choices that align with personal values and responsibilities, without compromising financial stability.

How to Build an Emergency Fund

An emergency fund has three to six months’ worth of expenses saved that is readily available.

How to save for emergency fund? It’s not that hard. You can set up automatic transfers from your salaried account to your savings account. Even small transfers add up over time without you even realizing it. You can jumpstart your savings by using your tax refund or bonuses to reach your goal sooner.

You can use LXME Gulluck to build up your emergency savings as it offers better returns than a savings account.

In conclusion, emergency savings are not just a financial tool, they are a powerful means of empowerment for women. By building a robust financial safety net, women can navigate the challenges of life with confidence, whether in the workplace, at home, or during unexpected crises.

Planning ahead with an emergency savings plan can give women much-needed financial flexibility and emotional space when the time comes.

FAQs

Why having an emergency fund is important?

Having an emergency fund is of utmost importance to navigate through life smoothly even during unforeseen circumstances. An emergency fund can enhance peace of mind by providing a safety net that can be used during any event. These events can include a medical emergency, job loss, a global pandemic, or caregiving responsibilities among other reasons.

What is a good emergency fund?

A good emergency fund has enough money saved to cover three to six months’ worth of expenses that is easily accessible.

How should you build an emergency fund?

You can build an emergency fund by setting up automatic transfers from your salaried account to your savings account. Even small transfers add up over time without you even realizing it. You can jumpstart your savings by using your tax refund or bonuses to reach your goal sooner.

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