May 25, 2024

Imagine that you will be unemployed for the next few months. Have you made any plans about how you can meet your essential needs such as food, especially your bills? But have you taken any financial measures for emergencies such as health problems?

 

What is an emergency fund?

An emergency fund is a savings amount in your bank account that you can use in an emergency that needs to be kept aside for job loss, illness, or important expenses. The emergency fund can be used in emergencies, as well as to cover high-interest debts and meet mandatory expenses for periods when you are financially tight.

An emergency fund must be created as it increases the financial security of individuals.

 

How to create an emergency fund?

The emergency fund should be created in an amount that can meet your mandatory expenses for at least three months, based on your monthly mandatory expenses. For example, if you have a mandatory expenditure of 1600 TL per month according to your budget plan, the sum of your quarterly compulsory expenses will be 4,800 TL. In such a case, you must create an emergency fund of at least 4,800 lira.

When creating an emergency fund:

I would like to mention a few important points that you should pay attention to when creating an emergency fund and that I hope will be of use to you.

 

Identify your need

Generally, emergency funds are created for quarterly expenses, but you can increase this time according to your needs. For a long-term financial security, it may be more advantageous to create a fund that will cover your expenses for at least 3 months and an average of 7-8 months. The important thing here is that you have the cash to meet all your needs in cases such as unemployment, illness, accident.

Be easily accessible

The fund you create must be easily accessible at any time for an emergency. You can keep the amount of funds you will prepare in your bank account and even use it in daily interest products. For example, you may prefer products that you can convert into cash whenever you need, rather than products that require long or even medium-term waiting, but you should make sure that they are accessible.

Do not use for unnecessary expenses

Your emergency fund has to be convertible and accessible at any time for its purpose, but it also needs to be used according to its purpose. For example, don’t use your savings unless it really requires an urgent need. For this, you can open a new bank account that is advantageous and free of account maintenance fees, and you can keep your money close in case of emergency and away from unnecessary spending.

Life; It can knock on your door with many unexpected surprises such as diseases, accidents and unemployment. Consider creating an emergency fund to take precautions and increase your financial security.

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