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What are the benefits of having an emergency savings fund?
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The primary benefit of having an emergency savings fund is that it can provide a financial cushion in case of unexpected expenses. This could include medical bills, job losses, or other unforeseen events. Having access to this money will allow you to pay off debts and cover basic living costs while your finances recover from the crisis. 2 Another advantage of having an emergency savings fund is that it can help you build long-term financial security by providing a buffer against future emergencies. It can also be used as a source of income if needed, such as for starting a business or buying a home. 3 Finally, having an emergency savings fund can help protect you from falling into a cycle of debt and poverty. By setting aside money each month, you can create a financial safety net that allows you to weather difficult times without relying on credit cards or loans.