What are emergency savings?

Emergency savings are an essential part of your financial planning. Our first priority is to help you get this in place and ensure it’s earning a decent (inflation beating) return.

Life is unpredictable and you never know when you might need cash in a hurry. Emergency savings protect you from unexpected financial emergencies but also give you the freedom to make big life decisions with confidence.

When you need cash urgently, the absolute worst thing you can do is take on unnecessary debt or be forced to cash out your long term investments.

What are they for?

Emergency savings are savings that you can use in an emergency. They are not your day-to-day cash and also not your long term investments.

They give you both freedom and extra peace of mind knowing that you can handle unforeseen emergencies and have some buffer to make big life changes.

Unexpected Expenses

Emergency savings can cover sudden expenses, such as medical bills, car repairs, or urgent home maintenance.

Income Protection

If you lose your job, or somehow find you’ve got a reduced income, emergency savings can provide financial support to cover your living expenses until you find a new source of income.

Financial Independence

Having a reserve fund gives you the freedom to make choices that align with your personal and career aspirations. An emergency fund makes big life decisions like changing jobs, starting a business, or relocating, much less stressful because you don’t have the immediate pressure of financial survival.

Avoiding Unnecessary Debt

With accessible emergency funds, you are less likely to rely on credit cards or loans during financial setbacks, which can lead to high-interest debt and long-term financial strain.

Peace of Mind

Knowing you have a financial cushion can reduce the stress and anxiety related to money matters. It allows you to focus on resolving any emergency situation that comes up rather than worrying about the financial implications.

Protecting Your Investments

Emergency savings prevent you from having to sell long-term investments, which might be bad timing due to market conditions or result in penalties and losses.