Emergency Account

A friend of mine recently secured a job in a local NGO and from the looks of it she is happy. She has tarmacked for long before getting a job and she has every right to enjoy her money right now. Like many people she has decided to start living on her own and therefore has bills to pay. So i asked her one of those questions that are hard to answer.If you were to lose your job today would you be able to pay your bills the next three months without borrowing and her answer was No. Hence the reason for this article today.

A lot of us when we get jobs we become comfortable. We forget that we are under another person's authority and they can decide they no longer require our services and we have no choice but leave. Some employers take time to process our final dues while others don't give us money for the years of service we have offered them. Hence the reason for an emergency account.

An emergency account is an account that one can fall back on  in-case of an emergency and hence not incur unplanned debts. This money should be highly liquid, that is easily accessible. It should be an equivalent of your three months pay to ensure you are at a safer position. Below are key points to having one:

• Start by knowing the amount that totals up to your three months pay
• Draw up your budget and set aside some money each month to accumulate into the target amount
• Define your emergencies so that you don't misuse your account
• Open a separate account from your normal account. Preferably open a savings account.
• Once you attain your target  think of a way in which you could invest and increase your money. Remember as years go on so does the cost of living  so you need to be prepared

As a family the same thing should be done. A couple need to sit and plan for their expenses and start saving towards it. To ensure discipline let it be a joint account so that there is discipline and agreements on when to use the money. As a couple define your emergencies. The account will go a long way to ensure that should one of you lose their job the house hold expenses are still met with ease.


How about you begin the year with this great decision of opening an emergency account. Remember its never change that is bad its resisting change that makes things uncomfortable for you. And a journey to complete a million mile walk starts with a single step. Now is the best time to start one if you have none. All the best.