Financial experts recommend that consumers put away a little money every paycheck towards an “emergency fund.” This money is meant to cover the ‘unexpected expense,’ whether that be a car repair, medical bill, or essential home repair. With the current coronavirus (COVID-19) pandemic and many people losing their jobs, it may be time to utilize your emergency fund.
Financial Hardship
One of the most common circumstances where a person would utilize their emergency fund is in response to financial hardship. The stimulus funds offered by the CARES Act helped for a short period of time, and many landlords, mortgage holders, credit card companies and other creditors have been willing to work with individuals who are struggling to pay their bills as a result of this crisis. However, even with that help, a person may still need to take some money from their emergency savings to pay for bills that need paid. Once your income returns, then begin replenishing the money taken from savings.
Medical Bills
The cost of medical care can be quite expensive, and an emergency medical situation always seems to come at the worst possible time. Approximately 137 million Americans are facing a difficult financial situation due to medical debt. According to a study from the Kaiser Family Foundation, it is estimated that 60 percent of people who are not able to pay their medical debt are also not able to pay other bills. If someone is facing a difficult financial situation due to an emergency medical situation resulting in bills that he or she cannot pay, it may be time to resort to emergency funds to pay off these debts.
Essential Home or Car Repairs
Sometimes the unexpected occurs, and money is needed for an urgent home or car repair. Keep in mind these types of repairs should be urgent in nature, meaning they need to be fixed quickly or else the person will not be able to use his or her car or live in his or her home.
The Importance of Replenishing the Funds
Once this money is taken out of your emergency reserve, it is important that whatever is taken out is replenished for the future. It may be a slow process, but with dedication and determination, even if just putting an extra $10 or $20 in the account every pay period, the savings can be brought back to where it once was.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.