In turn, the emergency fund can become an investment so that the money grows in a type of investment appropriate to each monthly income.
Scenarios such as the arrival of the pandemic, noted that financial emergencies occur for everyone at the least expected moment. These situations can extend your range of “pocket hit” with accidents or medical care, vehicle or home repairs, purchase of electronic equipment, among others.
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Having an emergency fund is a way to prevent, protect yourself and be the first source of help, starting is easy and, over time, this money saved can grow only by entering an investment instrument.
Why have an emergency fund?
Not having an emergency fund can generate a major financial problem such as resorting to loans and generating debts with interest that cannot be paid in a long time or in the worst case, use retirement funds and lose profits.
“The first step is to calculate how much of the money we receive monthly can be used for savings and decide that this will be the amount that will be allocated each month,” explained Gonzalo García Arboccó, Commercial Director of MFX Prime.
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How much money should I save each month?
Once the fixed monthly income is added, the allocation for savings must be calculated using the “50/30/20” rule: 50% for basic needs, 30% for personal expenses and 20% for savings.
It will also help to know how much money you want to save at the end of the year to achieve your goals. Reviewing your account statement regularly will help you know you’re on the right track.
READ: Six techniques to save a little money each month
Where can I save my money and how to make it grow?
Undoubtedly, having safe financial entities will make it possible to achieve the prevention aimed at with an emergency fund. There is also the possibility of making money grow on its own and generate greater returns if it is invested in products that are adapted to the reality of personal finances and goals. In the broker, for example, we have a product that fits the profile of each investor.
The clear rules:
It should be clear that this money is for a contingency plan, and that taking small parts of the savings for eventual expenses can affect its purpose.
“The road can be complex if you don’t have the savings habit, but reviewing the growth and profits it generates will motivate you to continue applying this good practice,” concluded García Arboccó, from MFX Prime.
READ: How much should you save according to your age?
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