An emergency fund is used when you are facing an emergency situation, such as termination of employment relationships (LAYOFFS), accidents, illness, and the things that nature has suddenly and could not be avoided. Due to the nature of the unexpectedly occurrence may result in you being a financial mess and needs are not being met, became this emergency fund role is very important.
In addition to being a reserve fund in case of emergency it can be damaging to your financial stability, the emergency fund could help to lower the level of stress that could be ' grip ' while emergency things happen. By having an emergency fund can also prevent you to shop impulsively and making the wrong financial decision, such as using a credit card over the limit because it could not afford to pay.
The recommended amount of emergency funds depends on the expenses of each individual and the dependents of each individual. So, this emergency fund is important as a basic benefit when things happen unexpectedly. This emergency fund is very important so we feel financially secure. Then, what about investment? Isn't investment also important?
It is indeed correct that investment is important, especially if we are to avoid the risk of inflation could not be obtained despite the saving in banks. Especially if the only income you expect salary. Investment is also essential if you have short-term goals, medium and length that can not be expected from the mere saving in banks.
Just as the proverb "bit by bit, long became the Hill", that's what happens on the investment. Even if you allocate funds a little bit, if done regularly, then you can enjoy the advantages of investing.
That investment is important as one way to achieve your financial goals. The investment is the best way to make the money grow, where these investments will generate profits without having to share time, energy and thoughts that you have spend working.
An emergency fund is your first obligation to achieve financial goals. And then, what if emergency funding has not yet been fulfilled is it permissible to invest stocks? Which one should be much precedence? Allow the stock to invest when the Emergency Fund has not yet been fulfilled? The following are the answers to those questions.
1. Don’t wear a Cash Emergency Fund for investment in shares
You can invest in shares but don't use the money in Your Emergency Fund. Due to the nature of the emergency fund is easily accessible, liquid (accessible) and safe. These three properties to the emergency fund to make stock investment is not the best thing to keep an emergency fund.
Stock investment is not liquid and certainly not secure because any time the share price fluctuations can experience when you need an emergency fund you. You can also suffer losses or even you can not pull out your funds when you need it though.
2. Do the preparations for an emergency fund and investment Shares in conjunction
You can invest in shares despite the Emergency Fund has not fulfilled 100%, even more would be more beneficial if you do both simultaneously. But you have to know how you would assign to an emergency fund and stock investments. Make sure you do it on a regular basis, in addition to being more disciplined financially; you can also meet emergency funds more quickly.
In addition, you can also make a profit by investing in stocks. Is it okay to invest in shares with a small but regular nominal value? It's okay, because with you buying shares at different prices, then you will get a reasonable purchase price, where the price of buying your shares is the average price.
You also have nothing to lose if you allocate all the funds to the stock at an expensive price instead of paying it at an unequal price. If you already know which stock you want and you already know at what price you bought it, then you can buy it at the price you want even if it's not routine.
The thing to keep in mind is to do a good calculation from the beginning when deciding to prepare emergency funds and stock investments. By calculating how much funds you will allocate, of course it will make it easier to manage finances and also allocate funds needed for emergency funds and stock investments.
Don't get hung up on how much should you allocate. Calculate also the time period you need to achieve your desired amount. While it is difficult and sometimes very large amounts, it is not impossible when the emergency funds and investments prepared simultaneously in finance.
For example, you allocate your steady income each month. You set aside 20% of his salary every month, 10% for the Emergency Fund and 10% for investment in shares.
What if you can't afford to allocate 20%? Then you could allocate up to 10% for the Emergency Fund and stock investments, make sure you know your financial capabilities. Do you enforce to allocate massive then you'll owe for the life that ultimately could not be paid.
By knowing your financial capabilities, then it can make it easier to allocate your money and will also direct you to prepare for an emergency fund and stock investments well. If you need the savings on other financial posts, do, so that you can also meet the needs of emergency fund and stock investments you want.
With the financial plan, then you won't feel overwhelmed to meet the need for an emergency fund and stock investments will you do. Be sure to know your financial capabilities, don't impose until you feel regret later on. No word is too late to plan your finances.
After reading this article, I'm sure you already know that the investment shares may be conducted concurrently with the preparation of an emergency fund is very important for you. Share this information to a friend or relative you who haven't learned the stock investment can be done concurrently with the preparation of an emergency fund for your future. Hopefully useful!