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The past year subverted everyone’s expectations. No one could have predicted that COVID-19 would affect our lives and the global economy to this extent.
Although we all did our best to cope, not everyone had an easy time dealing with the pandemic. Unexpected expenses, sudden illnesses, and career stability weighed heavily on people’s minds, and not everyone had enough funds for all these sudden financial needs.
On the fourth episode of the #SurvivingWithMissy series, a collaboration between Metrobank and The Philippine Star, Missy is determined to make the necessary changes to her habits to safeguard her future. Nothing is for certain, so how can she make sure she has enough money to take care of herself and her loved ones?
This part of Missy’s adventure begins with her friend reminding her of the latest game console they’ve been wanting to buy. Torn between a devil and an angel on her shoulders, she realizes that she doesn’t have enough money to splurge on her wants.
Motivated to plan ahead and learn how to properly balance her income, Missy reads through a Metrobank financial education article about setting up emergency funds.
Simply put, an emergency fund is a financial safety net of sorts. A certain amount of money you set aside and promise yourself not to touch unless it’s an emergency!
According to Metrobank, the importance of an emergency fund can’t be overstated; we never know what might happen in the future and it’s much better to be safe than be caught in the net of financial instability and debt. Metrobank lists down these tips to help you get started:
What to consider
Now, what are some things you should consider when you’re setting up an emergency fund? As Missy learns in previous episodes, settling your debts first is one of the most important things you can do. It’ll be much easier to save money when the looming presence of debt isn’t constantly hanging over your head.
A common misconception is that there’s a specific amount you need to have when setting up your emergency funds. In fact, it’s specific to each individual how much they want to and can set aside every month. A good rule of thumb is to calculate your monthly expenses and then multiply that by three, the amount you get is the standard amount for an emergency fund—enough money to last you three months if you suddenly lose your job during that period of time.
So you have an emergency fund, what now?
Now that you’ve set up an emergency fund, what do you do with it?
Don’t touch it! It’s called an emergency fund for a reason. What counts as an emergency, you ask? This can be losing your job, home repairs, helping someone in your family, or medical bills. As Missy succinctly exclaims, “It’s not my money until i absolutely need it!”
It’s also a good idea to set aside a bit every month. Luckily, Metrobank Online has a Schedule Transaction feature that allows you to automatically move money or send money to your other account, which you can use as your emergency fund. Intelligent financial decision in one easy click!
Choosing the steps toward financial stability is a monumental and admirable decision. Hopefully, with the financial education miniseries #SurvivingWithMissy, more and more people will get the nudge they need to be smarter with their money.
Check out future episodes of #SurvivingWithMissy, or look back on previous episodes on The Philippine STAR’sFacebook pagefor fun and easy to understand financial tips!
For more articles on financial education, visit their website.
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Editor’s Note: BrandedUp is designed to provide you with insightful, inspiring and educational content created by PhilSTAR L!fe in collaboration with brands likeMetrobank.