Corporate Financial Management in Facing Tax Changes

 The Importance of Emergency Funds and How to Build One Quickly

An emergency fund is a savings set aside to deal with unexpected situations, such as job loss, sudden medical expenses, or home repairs. Having an emergency fund helps maintain financial stability and avoid debt when facing a crisis.

The Importance of Emergency Funds

1. Facing Emergencies: Protecting finances from unexpected events without having to go into debt.

2. Avoiding Dependence on Loans: Preventing the use of credit cards or high-interest loans.

3. Providing a Sense of Security: Helping maintain financial stability and reducing stress when a crisis occurs.

4. Maintaining Financial Stability: Helping to continue meeting needs even though income is temporarily lost.

How to Build Emergency Funds Quickly

1. Determine Emergency Fund Target

Ideally 3-6 months of monthly expenses.

For freelancers, 6-12 months of expenses are recommended.

2. Separate a Special Account

Keep emergency funds in a separate account so you are not tempted to use them.

Choose an account with easy access but not too liquid so that it is not easily withdrawn for other needs.

3. Allocate Income Consistently

Set aside at least 10-20% of your income each month for an emergency fund.

Use an autodebit system to be more disciplined.

4. Reduce Unnecessary Expenses

Avoid impulsive purchases and focus on primary needs.

Limit non-essential subscriptions such as streaming or paid entertainment services.

5. Find Additional Income

Take advantage of skills for side jobs, such as freelancing, online sales, or small investments.

Use bonuses to increase emergency funds.

6. Sell Unused Items

Sell items that are rarely used to get additional funds.

7. Take Advantage of Cashback and Discounts

Use promos, cashback, or discounts when shopping to save money.

An emergency fund is an important foundation in personal finance that provides protection in times of crisis. With the right strategy and discipline in saving, emergency funds can be collected quickly to ensure financial stability in the future.