Let’s face it, this is a selfish world, and most people are focused on their own needs. So when people talk about the need for an emergency fund, they usually think only about emergencies that would happen to them . They think of lots of emergency situations like the loss of a job, car accidents, and home fires, but in every scenario they are the victim. I have to admit that I used to think that way too. That is until I watched a very old, (tivo’ed), episode of the Suze Orman show.
Suze Orman, and a lot of other financial advisers usually discourage parents from taking out life insurance policies on their children. Advisers argue that it doesn’t make sense to ensure a child who isn’t providing income to the family, and I for one agree with this. But a woman sent an email to Suze explaining that her child had passed away, and that it was the child’s life insurance policy that financially enabled her to take off from work to grieve for her child. This email really got me thinking… What if my parents became sick, wouldn’t I want the financial flexibility to be able to take off work to care for them. Similarly, the death of a parent, best friend, or other loved one would require time to grieve, and without a solid emergency fund how would you be able to afford time away from work?
A lot of people I know in the just under 30 crowd, don’t maintain emergency funds. For starters, this is still the age of invincibility, but secondly most individuals in this age bracket are healthy and many don’t have dependents, etc, so they don’t see a need for an emergency fund. (Of course, take it from someone who unexpectedly ended up in an emergency room, no one knows when an emergency can occur.)
Many of those in the under 30 crowd, without emergency funds, say their parents will take care them in if an emergency occurred. That’s all well and good if the emergency happens to them, but what if their parents became ill? Would they really want to burden their parents with paying their airfare or helping them make up for lost income if they take off from work? In times of suffering the last thing you want to do is to burden those in need with your own needs. So the next time you’re trying to decide whether or not to save money in your emergency fund, realize that an emergency fund is not just for you, it can also help in those situations where a catastrophic event happens to someone you love.