The reason you should have an emergency fund is all in the name. You always want to have money stowed away for a rainy day or emergency. Life is unpredictable. Even if you’re a person that sticks to a tight budget, life can throw you through an inevitable loop. Here at Bowman & Company, our sole goal isn’t to help your small business thrive. Our award-winning company believes in giving you the tools that will enhance your personal wealth management as well. Here are Bowman & Company’s top four picks for having an emergency fund.
If You Need to Pay Off Debt
An emergency fund can help you keep debt at bay. If there are things that you don’t budget for, such as car repairs or medical funds, emergency funds serve as a safety net to help you handle these stressful events and put you one step closer to staying out of debt. If you have medical issues, we also recommend that you have a backup financial plan. Even with health insurance, medical bills can be hard to cover. A financial backup plan makes it more manageable to add extra money to your debt immediately so that you have a cushion.
If You Are Self-Employed or a Contractor
Are you self-employed, a contractor, or working at a job that doesn’t make it possible to collect unemployment? It is vital to have emergency funds in place because there are times when a business may be slow. This fact is true of all companies whether you’re self-employed, working at a small business, or a large firm. This fact is especially true since we’re in the middle of a pandemic.
If you’re a contractual worker whose term is about to be up, you indeed want to stow away extra money. Another financial planning tip is to ensure you keep track of your invoices. You never want to miss out on outstanding payments that you owe and have to use your emergency fund unnecessarily.
If You’re a Homeowner
What some people don’t realize is that it’s cheaper to buy than rent. It may sound too fantastic to be true, but a mortgage is often less expensive than rent. However, you have to consider that even newer homes have issues. There could be repairs that put an unexpected hole in your wallet. An emergency fund can offset these expensive home repair costs. Also, your financial planning should always account for taxes.
If You Have a Very Special Goal to Achieve
Do you plan on owning a small business? Do you want to own a home? Emergency funds can stop you from dipping into your savings. When unexpected expenses crop up, you never want to find yourself moving backward financially.
If you’re looking for an award-winning company to help you with your financial planning, reach out to Bowman & Company, CPA today.
Contact Bowman & Company Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services are aimed at decreasing your taxes and increasing your net worth through responsible, timely, and accurate record keeping. We offer our services to clients throughout the Washington, D.C. metropolitan area including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.