Having an emergency fund is a big step toward financial independence. They come in handy for “emergencies”. Sometimes we make our poor decisions into emergencies.
The End leads to the Unexpected
My parents retired when I was a young adult. My mom was forced to retire from her job and started working part-time until she was diagnosed with cancer and quit working totally. My dad was semi-retired and quit after mom quit working. My mom had retirement benefits from her original job because she worked there for over 35 years.
My dad had been self-employed his whole life mainly, but had no pension, no retirement plan, was totally dependent on social security and mom’s retirement. My mom passed away; we had always been told that mom’s retirement would transfer to dad at the time of her passing. It could have but mom did not set it up this way. So now my dad was left with just social security, which wasn’t much.
Poor Personal Decisions
Not only did mom’s passing affect my dad’s financial state, but mine as well. I was not as cautious as I am now. I made a lot of decisions that were not made in the right mindset. The stress and grief led me to make decisions about things that I have learned from and know better. My poor personal decisions lasted for a few years. One example, is I left a job with no backup plan. I had moved back home, probably a mistake in itself, but I was saving money. I did need to get out of the job cause it was causing me too much stress and health problems, but I should have waited. The result is I blew through thousands of dollars from my life savings. Also, during this time, I did not have a lot to offer in terms of being a friend so when I knew my friends needed money I helped, some knew, some didn’t. I absolutely do not regret this, but I do know it was the right choice for helping my friends in need but was not a sound financial choice.
A Medical Emergency can become a Financial Crisis
During that time, I had a medical emergency. I was living at home and my dad heard something and came to where I was and found me unconscious. He called emergency services and thought I was dead. I woke up in an ambulance arriving at the hospital and saw my dad once inside and he was super scared. I got the care I needed, but also got the bills from it. Even though I had insurance, there were still a lot of bills and fighting with insurance and billing institutions to get things covered.
You Never Know
From one moment to the next, we don’t know what is to come. These are just some examples. You could have a mechanical problem with your car. The possibilities of what causes a financial emergency are many. Prepare for the unexpected and do not make poor personal decisions.