Scenarios such as the arrival of a pandemic, made it clear that financial emergencies occur for everyone at the least expected moment. These situations can expand your range of “pocket hit” with accidents or medical attention, vehicle or home repairs, purchase of electronic equipment, among others.
Having an emergency fund is a way to prevent, protect yourself and be the first source of help. Getting started is easy and, over time, this saved money can only grow by entering an investment instrument.
Not having an emergency fund can generate a greater financial problem such as resorting to loans and generating debts with interest that cannot be paid for a long time or in the worst case, using retirement funds and losing earnings.
“The first step is to calculate how much of the money we receive each month can be used for savings and decide that this will be the amount that is allocated each month,” he explains. Gonzalo García Arboccó, Commercial Director of MFX Prime.
Once the fixed monthly income is added, it must be calculated to allocate for savings using the “50/30/20″ rule: 50% for basic needs, 30% for personal expenses and 20% for savings.
It will also help to know how much money you want to save at the end of the year to help you reach your goals. Reviewing your statement regularly will help you know you’re on the right track.
Undoubtedly, having secure financial institutions will make it possible to achieve the prevention that is targeted with an emergency fund. There is also the possibility of making money grow on its own and generate greater profitability if it is invested in products that are adapted to the reality of personal finances and goals. “At the broker, for example, we have a product that suits the profile of each investor,” said the specialist.
It must be clear that this money is for a contingency plan, and that taking small parts of the savings for eventual expenses may affect its purpose. “The road can be complex if you don’t have the habit of saving, but reviewing the growth and profits it generates will motivate you to continue applying this good practice,” said García Arboccó, from MFX Prime.
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