What Constitutes A Financial Emergency?

 What Constitutes A Financial Emergency?

Personal finance tips always include having an emergency fund ready for use during financial emergencies. But what is a financial emergency, and how do you know when it is acceptable to dip into your emergency fund? More importantly, can we help you with financial emergencies?

What Is A Financial Emergency?

An emergency fund is savings that you ideally use only on urgent, unplanned situations. Thus, a financial emergency is an urgent and unplanned situation. No, an item you suddenly want to buy is not a financial emergency, and neither is a vacation with your friends, despite the seemingly urgent and unplanned nature of these things. 

A financial emergency is an unexpected life event that prevents you from meeting your and your family’s basic needs. An example here is if you are laid off, like what happened to millions of Americans at the start of the pandemic. Since your salary is cut off, you can dip into your emergency fund to cover your basic living expenses. Another possible financial emergency would be a hospitalization if you don’t have health insurance. 

In summary, a financial emergency is an expense involving your basic needs when a life event prevents you from having money to pay for these. Not having money for your rent because you spent it on a new phone or on vacation does not constitute a financial emergency!

What To Do During A Financial Emergency When You Don’t Have An Emergency Fund?

Having an emergency fund is all about being prepared for any curveball life may throw at you. But, let’s face it, it’s quite difficult to save up for an emergency fund when you’re also paying for various debts. If this is your case, you are not alone —40% of Americans don’t have an emergency fund, too. What can you do, then? You can use the federal and public sector employee loans from us. 

We offer convenient, affordable loans for federal employees and public sector employees. It’s perfect for covering financial emergencies because it is fast, does not require credit checks, and has stress-free repayment schemes. Most importantly, Access Loans’ employee loan programs offer low interest rates. You can cover your financial emergencies with no worries even without an emergency fund.

Conclusion

An emergency fund is a crucial savings account that should only be used for financial emergencies. Financial emergencies are expenses related to your physiological needs that you cannot cover because of an unexpected and unstoppable life event. 

If you don’t have an emergency fund at the moment, you don’t need to live in fear. You can rely on Access Loans to help you with your financial emergencies.

You should only use your emergency fund for financial emergencies. But if you don’t have an emergency fund, we can help you through it.

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