Emergency Fund…taken for granted no more!

Having an emergency fund is a must in any financial plan as we do not want to touch the savings we have for our children’s education or the retirement fund we diligently built-up when some unforeseen events happen.

Although the pandemic disrupted this principle especially those who lost their jobs or got saddled with sickness, this simple guide remains to be relevant: a prescription of at least 3 to 6 months of your monthly cost of living and if you have more savings, it is better to put the excess in an investment fund that gives you better returns.

But first, why is an emergency fund important? Quoting Zach Buchenau, a personal finance expert (https://bethebudget.com/why-is-an-emergency-fund-important/) “emergency fund is important because it acts as a financial cushion in the event of an unexpected expense. Whether it be medical bills, home repairs, or a family crisis, an emergency fund can help you steer clear of debt, protect your assets, and avoid unnecessary financial struggle.”

So how do we build an emergency fund? Here’s a simple guide: Read more at https://www.saveandinvest.org/military-everyday-finances/start-emergency-fund

  • Chart your monthly income and expenses. This will help you determine not only your monthly cost of living but can also help you identify where you can cut expenses in order to set aside for the rainy days.
  • Set your emergency savings goal. As I mentioned earlier, a quick guide is 3 to 6 months.
  • Develop a plan to start saving. For some, cutting costs is a must and tracking your expenses can help you find what items you can give up to give way to savings.
  • Put your emergency fund in an accessible place. A regular bank savings account is a good place for this as you can access it without paying penalties. As such, do not mind the very low interest rate as that is the reason why you can withdraw it anytime.
  • Stick to your plan. It may not be easy as there are lots of reasons we come up with why we can’t set aside the amount regularly until the fund goal is reached but resist the temptation and stick to the purpose of the fund – it should only be used for Emergency.

I must add that expenses like tuition fees are not “emergency” expenses as these are scheduled and can be planned ahead. There are health plans that can help cover medical expenses and it is always advisable to get covered for these expenses too.

Finally, this Covid-19 pandemic has exposed our financial vulnerabilities and has taught us so many lessons including ensuring having a sufficient emergency fund, having health plans and insurance coverage. Let us not waste these lessons by not acting on them and plugging the holes in our financial plan.

Let’s not take for granted setting up an emergency fund anymore. It’s one lesson from this pandemic that we must learn and act on.

Community Bubbles…a silver lining!

It’s more than a year now since the pandemic struck the world and brought us back home…figuratively and literally.

In our country with the longest lockdown in the entire world, we are back to where we started a year ago – enhanced community quarantine (ECQ) in the entire Metro Manila and some nearby provinces. We are seeing record-high daily reported infections as there are now 4 confirmed variants in the country.

We are back to where we started a year ago…

But just like any crisis, there are opportunities that surface and one of these is the emergence of community markets to bring goods and services closer to the consumers so that there is no more need for residents to leave their homes for essential items. With the plea to “stay home” and supermarkets having long lines with limited customers allowed at a time, more and more have opted to buy online but given add-on delivery fees, community markets have become the better alternative.

Subdivisions cafes, restaurants, grocery stores are now offering take-out, pick-up and delivery options and condominium residents found a business outlet right in their own buildings selling various stuff to fellow condo dwellers.

Our village is a fine example of this community economic bubble. We are a community with a little over 130 households and yet the range of offerings is just so interestingly good: from fruits & vegetables; to seafoods and packed dishes; cookies, breads, ice cream and home-cooked snacks – the entrepreneurial juices of the neighbourhood really came out during this pandemic. There are even medicines and PPEs as well as medical tele-consult with neighbour doctors offering their professional services so there is no need to go to over-capacity hospitals. It gave all of us a sense of security knowing that we have doctors a few minutes away.

And the best thing? We got to know each other! It took the pandemic to get our homeowners association to finally get organised after years of failed attempts. Since it was lockdown, homeowners were forced to be home so we got quorums during our general assemblies and with almost all stuck at home, we realised what needs to be done in our village and everyone became more engaged in village concerns.

Out of the crisis, another amazing thing happened…we gained new friends in the neighbourhood and what used to be just a wave and hi-hello became getting-to-know conversations and for the first time in almost a decade of living in the village, we were invited in our neighbors’ homes and we invited them to ours. That’s what I call a silver lining!