IN 2025 IT IS IMPORTANT TO SET UP AN EMERGENCY FUND

 Life is tough. Last year there was a student who almost missed national exams simply because the parents did not have money for school fees. I have seen university students who miss graduation simply because they lacked money for sitting exams. Lives have been lost due to lack of funds for medical treatment. What does this call for? A emergency fund is critical for each individual especially due to the fact that we live in a Volatile, Uncertain, Complex and Ambiguous world. Who remembers the tough times of lock down. There was a rise in domestic violence and mental health issues. This was because families could not cope up with the reality that they could not wake up to look for money. I remember there were two incidents where 2 men burnt themselves since they not fend for themselves.

The absence of money during emergencies can lead to a lot of pressure that people are forced to sell off their valuable assets to meet the costs of the emergencies. This brings our attention to the importance of setting up an emergency fund that can cater for our expenses in case of any eventuality. On 3rd January 2025 there was a story of over 16 shops that got burnt in Kampala and 4 lives were injured. These shop owners did not expect these scenarios and imagine the impact on their lives. There were exposed to unexpected shocks that life brings. Some of them have loans and they have to service them. Today most use boda bodas and though they are a quick means of transport they also expose the public to risks. The question is in case of any eventuality how prepared are we.

WHY SET UP AN EMERGENCY FUND 

1.Calculate your monthly expenses

2.Choose a funding goal

3.Choose a savings vehicle

4.Create a separate emergency fund account

5.Set up automatic transfers

6.Start with a small amount

7.Increase your contributions

8.Stay disciplined

Life is full of risks. Due to this we should always anticipate such risks and prepare for them. This explains why an emergency fund is critical.

Phillip Kiryowa

Personal Finance Coach

Advanced Empowerment Link

+256752615916

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