10. Swabeng Dilemma: Do I Really Need Emergency Funds?

Let's say you were able to clear out all your debt within the time frame that you've set. Congratulations!

Then what's next? Would you borrow again to get new debt and pay them again?

At this point, do you really want you financial status to be that way? Get Debt, Pay Debt over and over until your done?

I hope you'd realize that if you never get out of that Debt Cycle, your future generation will be the ones to suffer in the long run. Which means that in case something happens to you while you're still on Debt, Who will take your place to settle them? It would have been easier that your entire debt will be wiped out once you're done but that's not the case here.

Do I Really Need Emergency Funds? First timers would answer NO for the following reasons


1. I have all the time in the world.

Being young (say you just finished college and just started your first job) would be the first excuse of not saving up for emergencies. I'm sure most (me included years ago) of you are still dependent on our parents as we still live with them and they still cover rent (or mortgage), food and all the basic utilities (water, electricity, cable, etc). In the event that something unfortunate *knocks on wood* happens to either one of them (or both) do you know what happens next?


2. I don't earn that much yet for me to save some.

Personally, this was my excuse when I was starting. I kept on saying I'll start building my emergency fund when I'm earning a heftier salary. I realized that If I can't save money early in my career, I would have a hard time during the same right now.


3. I'll just worry about money when there is an emergency. 

While you have your parents, relatives, friends, and even your credit card, never assume that they're always be there to take care of you in case of emergencies. You should realize that they have their own financial obligations to take care of. Also do not consider your credit cards as your emergency funds, remember that if you pay the minimum and/or on a delayed basis, its interest will pile-up until your debt doubles. Would you want that?

On my next post, I'll show you how to build your emergency fund so you'll have a peaceful sleep every night.