“Into each life some rain must fall. Some days will be dark and dreary.” – Henry Wordsworth Longfellow

“Your bill is J$2,100,”  the cashier muttered.  As I handed over the money to the cashier at the hospital, I wondered what would have happened if I didn’t have enough money to pay for the admittance fee. Would they not attend to my six-year old son’s obvious case of emergency?

“Your lab fees are J$1,734 and the cost of the disposables is J$2,926.”  One more time I had to pay the smiling cashier to ensure that the emergency care was provided.  Hours later, as I prepared to leave the hospital with my son, the nurse handed me the documents with a note that there was yet one more bill to be paid.

“Your charge is J$1,904.” As I handed over the money, I realized that my early morning emergency had already cost me over J$8,600, and this was with health insurance! With the cost of medication to come, I knew that my budget for this month had just been turned upside down.

However, I gave thanks that I was able to immediately find the money I needed for this emergency situation.

My recent episode with one of life’s ‘dark and dreary’ moments highlights the importance of saving with emergencies in mind. Whether it is unexpected medical expenses, loss of income, or the effects of a natural disaster, at some point in our lives we’re probably going to have an emergency that requires money quickly.

Many people neglect to plan for their emergency needs, in the same way that they fail to plan for many other financial goals. After working with several persons in financial difficulties, I have realized that many of the money problems that crop up could have been prevented with a little consideration for the future and some basic forward planning.

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There are good reasons why financial planning experts encourage you to save towards emergencies as your first financial goal.

Firstly, an emergency can strike without warning at any time. You really don’t have the luxury of planning the time when you want to achieve this goal, and leisurely putting aside money every month in order to make the target. Start now with urgency to put aside money for emergencies!

Secondly, having an emergency fund gives you a financial cushion that will help to protect your other goals. I have seen cases where people have been saving diligently towards a house or car and then a crisis strikes. With no rainy day money set aside, they had to raid their special account to deal with the emergency.

Having to break an account that was designed for another goal tends to have a negative psychological effect. What eventually happens is that they find other excuses to finish using the money in the account, or they just give up on the plan in frustration.

The first step in saving for emergencies is to calculate your regular monthly spending needs. Using your budget planner can help you arrive at this total. It’s advisable to put aside an emergency amount that represents at least three months of your expenses. A six-month cushion is even better, as some emergencies like job loss can remove your earning power for long periods.

Once you’ve worked out the desired amount for your emergency fund, start saving regularly towards your target. The faster you can arrive at your goal, the quicker you’ll be protected against life’s eventualities.

Some ways to boost your emergency fund include putting aside your partner draw or bonus money for this purpose, or sacrificing any luxury spending for a few months.

Here are some other tips that can help you to successfully plan and save for emergencies:

1.   Always keep some cash at home. If you have to run out in the middle of the night, you may not have time to go to an ATM to withdraw money.

2.   If you’ve completed repaying your loan or hire purchase debt, immediately re-direct this monthly amount into your emergency fund account.

3.   If it’s going to take a long time before you can save to reach your emergency fund target, get a credit card that you hide away in a sealed envelope marked ‘for emergencies only.‘