{"id":6320,"date":"2019-10-28T22:01:38","date_gmt":"2019-10-29T02:01:38","guid":{"rendered":"https:\/\/goday.ca\/blog\/?p=6320"},"modified":"2021-09-30T10:42:48","modified_gmt":"2021-09-30T14:42:48","slug":"are-you-financially-prepared-for-the-unexpected","status":"publish","type":"post","link":"https:\/\/goday.ca\/blog\/are-you-financially-prepared-for-the-unexpected\/","title":{"rendered":"Are You Financially Prepared For The Unexpected?"},"content":{"rendered":"\n

Every year, a large proportion of Canadians face an unplanned emergency expense. And when those unplanned expenses come, do you have the savings set aside to ensure you can make all your payments? When it comes to making sure all your bills get paid and you\u2019re not maxing out on all forms of payment methods, people turn to GoDay for a payday loan<\/a> for quick and easy cash. According to\u00a0Investopedia<\/a>, an emergency fund is an account used to set aside funds needed in the event of a personal financial dilemma, such as the loss of a job, a debilitating illness or a major expense. The purpose of the fund is to improve financial security by creating a safety net of funds that can be used to meet emergency expenses. An emergency fund<\/a> is recommended and can make a significant difference when it comes to your finances in times of need. You will most likely have to deal with an emergency resulting from an unexpected situation that will affect your finances at some point and it is usually these unplanned situations that do not always give you time to adjust your budget. You may not be able to predict when a financial emergency will happen, but you can at least be prepared for one. <\/p>\n\n\n\n

How To Start Building Your Emergency Fund<\/strong><\/p>\n\n\n\n

One of the main questions people ask about when starting an emergency fund is where to start? Like any kind of financial decision, doing your research into what is best for your lifestyle and finances is what will determine how to build your emergency fund and how it will affect your financial future. It is kind of like learning how to budget for the first time<\/a>. The ideal emergency fund lets you see your money grow and gives you complete access to your funds quickly and easily when you need them. You should consider accounts tax-free savings account or a high-interest savings account. Some people also use Tax-Free Savings Accounts or TFSA\u2019s in times of need, although access to your funds isn\u2019t always as easy compared to a high-interest savings account. In cases where people need money immediately, that is where we can help. Within 24 hours you will have the cash you need to help with any financial bind you are in. Curious about how much you should have in your emergency fund?\u00a0RBC has a tool<\/a>\u00a0to determine how much you should have saved in case of an emergency based on your current salary.<\/p>\n\n\n\n

 Be Realistic About Your Savings<\/strong><\/p>\n\n\n\n

Who else feels like they are forever trying to save\ntheir money? Our secret to you \u2013 everyone is! Whether you are saving for a\nspecific item, the vacation you deserve, your dream home, or retirement, saving\nmoney is essential for ensuring that you will be financially successful. Saving\nfor your emergency fund won\u2019t happen overnight. It can take time to reach the\ndesired amount for your emergency savings. It is better to start with a small\namount so that you don\u2019t become discouraged. Start by figuring out what you can\nput aside every week, even if it is a small amount each month, a little goes a\nlong way over time and you don\u2019t want to have any other bills and savings to\nsuffer. As a general rule, it is recommended that you save the equivalent of\nthree to six months of your regular expenses if a situation were to ever\nhappen. These amounts can sometimes seem out of reach, which is why we\nrecommend saving gradually. Little things like making saving money a habit by\nautomating your savings by setting up automatic transfers to your emergency\nfund account or creating savings reminders in your calendar are a great place\nto start. <\/p>\n\n\n\n

When To Use Your Emergency Fund<\/strong><\/p>\n\n\n\n

The only time to use your emergency fund<\/a>,\nwhich is why it should be different than a regular savings account is when you\nneed to prepare for the\nfinancially unexpected<\/a>. And no, shopping sprees don\u2019t count because an\nemergency is a major and sudden need that\u2019s not part of your current budget and\nthat\u2019s unplanned. Before using all or part of your emergency fund, determine\nwhether you\u2019re really experiencing an emergency or if the expense is something\nthat can be put off until you\u2019ve had the opportunity to save. When it\u2019s truly\nan emergency, do not hesitate to use your emergency fund. On the other hand, if\nyou think that you can get by or find you do not have a major need for this\nmoney, do not touch your emergency fund. If you feel that other financial\noptions such as applying for a payday loan or using a credit card to pay the\nbalance in full by the end of the month, this may be a good option depending on\nyour financial needs. If you do not think that you would be able to pay the\nbalances back in full, then hold off on that expense until you have saved\nenough. While your emergency fund should be easy to access when you are in a\ntime of need, it is very important not to let yourself be tempted by this money\nand to leave it for when there is a real financial emergency.<\/p>\n\n\n\n

The Financial Consumer Agency of Canada<\/a> (FCAC) share some examples of unexpected financial emergencies including:<\/p>\n\n\n\n