Why It’s So Critical
I don’t like to use the word “critical” often, because it’s often an exaggeration. But in this case, when we’re talking about the health of your finances, an emergency fund is definitely critical.
If you are having financial problems, the most important steps you can take immediately are 1) reduce your spending by being more frugal; 2) stop getting into debt; and 3) build an emergency fund of $1,000 (and later you can increase that to the standard 3-6 months of income).FREE JIM CRAMER - 14-day trial to Action Alerts PLUS, & his latest bestseller FREE. Click here
Here are a few reasons an emergency fund is critical to your financial health:
- Stop getting into debt. When an emergency comes up, if you don’t have an emergency fund, the first thing that will be cut from your budget is your debt repayment. You’ll use your credit card to pay for the emergency, and then you’re deeper in the hole. An emergency fund stops the need to use credit to pay for emergency expenses.
- Smooth out your budget. If unexpected things come up, you don’t have to continually re-factor your budget to pay for these things. With an emergency fund, it makes budgeting much easier.
- Prevent late fees. If you are living paycheck-to-paycheck, you will come up with times when you have to pay a bill late, or overdraw your bank account. With an emergency cushion, you avoid these financial hits.
- Get ahead. If you can get a month ahead, your financial stress will drop way down. Instead of always playing catch-up, you can pay your bills ahead of time and sit back and relax. Unrelenting stress can increase your risk of obesity, depression, anxiety disorders, sleeplessness, digestive complaints and heart problems.
- Digestion. You may have a stomachache right before a presentation at work or you may have one that lingers every day. Stress hormones slow the release of stomach acid and interfere with how well the stomach can empty itself. These same hormones cause the colon to work faster and may lead to diarrhea.
- Cardiovascular system. High levels of cortisol can raise your heart rate and your blood pressure. Cortisol can also have an affect on your cholesterol levels. This, in turn, increases your risk for heart attacks and strokes.
- Immune system. Study after study has shown chronic stress can make you more vulnerable to colds and infections. Normally, your immune system responds to infections by releasing chemicals in the body that cause inflammation. This is part of the healing process. Cortisol, the stress hormone, is produced to turn off this system when you are better. However, because it is elevated during times of stress, cortisol keeps your immune system suppressed and makes you more vulnerable to colds and infections.
- Weight. Cortisol stimulates fat and carbohydrate metabolism, which boosts your appetite. Cortisol can also affect where on your body you put on weight. If you have high levels of stress, you are more likely to put on weight in your abdominal area, which puts you at higher risk for heart disease and diabetes than people with pear shapes.
- Mental health. The constant flood of stress hormones puts you in a constant state of anxiety, worry and helplessness. This eventually may set you up for depression and anxiety disorders, especially when they run in the family. Some people are just more sensitive to stress than others. Also, because your body is in a heightened state of arousal, you will probably have trouble sleeping.Reduce Blood Pressure with all natural Healthy Heart at HCBL $6.99
- Insomnia. If you've had plenty of nights where you stare at the clock and wake up groggy, depression could be partly to blame, since one of its symptoms is insomnia. Stress keeps your brain active, too, so it's likely that constant stress will keep you up. Contact Mr. Dangerfield at firstname.lastname@example.org