With the current economic crisis that the world is facing, it has created a lot of financial hardships. Retirees can attest to that financial hardship because the recent downturn in the financial market has caused a lot of money from the investments held by shareholders.
Retirees who have indexed pensions might not be that much affected because of the pension. However, those who are living based from the proceeds of their investments may experience financial hardships during tough economic times.
In order to minimize the effects of the recession or the economic turmoil, there are strategies that can be implemented. One way is to build an emergency savings fund. An emergency savings fund will provide you money especially during the tough times.
When you are planning to build an emergency savings fund, you might want to put it in an easy access savings account so that you can get it whenever you need it. Although you might not get higher interest with that type of savings account, you can always be able to access your funds whenever you need them.
With that easy access, you might find it difficult to let that money there and not be tempted to touch it. However, having an emergency fund gives you a sense of security because you know that you can survive even during the tough economic times. You can be at ease and not feel stressed in general.
On the other hand, those who don’t put money aside feel unsecured and always worry about how they could survive the economic crisis. For those who do not have emergency funds, simple problems such as replacing a lost cellphone can be very stressful.
Generally speaking, saving money is a calculated process. You really need to allot funds regularly so that you can be able to gather an amount enough for emergency use. If you are planning to setup emergency funds, you should save for at least six to eight months expenses. An automatic transfer from your bank account to your emergency funds account would be the most convenient method to start saving for your emergency funds.
Seeking the help of an expert can greatly improve your skills in managing your finances and be able to survive the economic crisis. Aside from that, you will also gain more knowledge about handling your emergency funds and where to place it while you’re still saving up for it.