If you are thinking of switching to a freelancing career, you need to seriously build your emergency fund first.
A few days ago, my husband’s laptop stopped working. Both of us work as freelance writers so you can guess how important his laptop is. According to the service center, it could take a few weeks to a month before the laptop can be fixed. Obviously, waiting for it to be fixed is not an option. We need to find a replacement so he can keep working while his laptop is being repaired.
As a freelancer, our income is not stable. We only depend on what project is given to us. If we do not work, we cannot rely on a sick leave or vacation leave to help pay the bills. It is a situation that can easily make us feel anxious.
But believe it or not, we did not panic.
I do not say that to sound cocky. But I just want to stress the importance of having an emergency fund.
An emergency or reserve fund is the money that you will use for unexpected situations. Life can be very unpredictable. It does not matter if you are very careful with your actions or not. You will face these emergency situations and you need to be prepared for them. There are too many outside forces that could land you in an unexpected situation. You could get into a car accident. You can get sick. Your home could be in need of a repair. All of these situations can happen and you need to have the finances to help you pull through each one.
In a freelancer’s world, a busted laptop can be considered an emergency because it is just like being temporarily unemployed. You can just imagine the stress and pressure that we should have felt.
Fortunately, we had enough good sense to save up for an emergency. Instead of feeling stressed, we had our emergency fund to rely on. That allowed us to immediately look for a replacement that can fit our budget. Instead of worrying about where we will get the money, our emergency fund allowed us to go straight to the problem and solve it.
Hopefully, you will not wait for the unexpected to happen before you set aside an emergency fund for your family. If you have young ones, like we do, this becomes a necessity.
Some people I know would always say that they are not earning enough money to have something extra to put aside. Do not have that mentality. Even if you can only save P500 each month, that is enough. It would soon become P6,000 after 1 year. It can mean a lot when you are really strapped for cash.
Think about it. The financial security that an emergency fund can bring a huge relief when the going gets tough.
It is actually what makes me feel calm, even if I know that I have to bring my youngest son to the doctor tomorrow.
🙂Image courtesy of jk1991 for FreeDigitalPhotos.net