An emergency fund acts as a safety net in that unpredictable series of events called ‘life.’ Those living paycheck to paycheck or who are currently carrying debt are especially in need of a financial cushion. But while it is important to have some cash on hand, with today’s interest rates, chances are you’re losing money by leaving your capital in a basic savings account. It’s a smart idea to keep a mix of cash and other assets including precious metals and gems such as pearls in your portfolio.
Another reason to diversify your assets into gems and jewelry is that you can actually enjoy them while they maintain — and potentially gain — in value. A pearl necklace is a classic that never goes out of style, and you can wear it as an elegant daily reminder of your financial security.
If you’re already in debt, the concept of setting money aside may seem strange. After all, shouldn’t you be paying down your credit cards? Absolutely, but that doesn’t mean you can’t find a way to skim a few dollars off your expenses each month by skipping that $7 latte or brown-bagging your lunch a few times a week.
While it may sound difficult to set funds aside, and certainly not as fun to save money as to spend it, in the long run, an emergency fund can save you a lot of stress. When you consider that one out of four people currently has unpaid medical bills, almost the same number will overdraw on their checking account this year and one in six will take a loan from their retirement savings, it makes sense to tighten the belt, even just a little, so you don’t end up as one of those unpleasant statistics. If you’re still not convinced, here are a few more compelling reasons to save:
Job security may sound like an oxymoron to some, and for the vast majority who don’t have it, it’s a smart idea to have a backup plan in the form of assets to tide you over until something else comes along. Yet another good reason to invest in jewels: you can wear them to a job interview.
Or what if the opposite happens: you land your dream job — except it means taking a pay cut. Or maybe you’ve been offered an amazing promotion, but it involves relocation. Even though these are positive scenarios, they will still require an extra outlay to tide you over.
For families living on a single income, an emergency fund is a must. The loss of a job in this case could spell disaster if you have nothing saved. Even power couples need a reserve fund. Pregnancy happens more often than you’d think.
Illness is another unpleasant surprise that can strike anyone at any time, so it’s a good idea to be prepared. Even if you’re not the one who is sick, medical treatment can get expensive, and if you need to take a leave of absence from work to care for an ailing family member, your income may be further reduced.
Even if you stay healthy, a relative or friend might not be so lucky and need your help. An emergency fund means you can do so without going into debt. Another unplanned expense that can crop up is last-minute travel for a funeral or other family crisis.
Yet another reason to have some collateral tucked away is identity theft. It happens every day, and it can mean getting locked out of your credit cards, and even your bank account, for a period of time until the issue is resolved. An emergency fund is a real life saver at times like these.
Perhaps the best reason to have an emergency fund is for peace of mind. The last thing you need when you’re going through difficulties is to find yourself confronting a heap of debt.
The saying about having a something set aside for a rainy day is a cliché for good reason: it just makes sense. How much do you need? This is a judgement call and philosophies vary, but most experts recommend having 3 to 6 months of living expenses on hand. However, if you’ve got high interest rate credit card debt, you could start with $1000, then get busy paying down your debt. Do what you can, but the important thing is to get started. And as with anything, only invest in assets you feel comfortable with and understand.