Day 3 - Ready For A Rainy Day - FPiD

We saw a sleek-looking umbrella at Ikea a few months back. It was still summer in Dubai. (Isn't it mostly summer in Dubai?🤔)

I thought of buying it, as we lost the one we had earlier while moving houses. Moreover, we last used an umbrella two years ago. So we were wondering if we really need it.

Image Source: https://www.ikea.com/ae/en/p/knalla-umbrella-black-60282332/

My partner suggested that it is only 19 Dirhams, let's buy it, just in case we have to use it sometime. So we purchased two umbrellas, put them in the closet, and forgot about them. 

We just remembered about the umbrellas when it started pouring on Saturday last week. I had a doctor's appointment at 2.00 pm, and it was raining cats and dogs.  

Without the umbrella, I would have had no choice but to cancel the doctor's appointment or get thoroughly wet in the rain even before getting into my car. 

Thankfully I had the umbrella. I could not only reach the appointment on time but also enjoy the rain and even make a video.

This incident also gave me the idea for today's post.

Welcome to Day 3 of the Win With Money Challenge.

Getting Ready for a Rainy Day.

We all have good days in our lives, and we have bad days. We could also have days we wish never happened to us or anyone else. 

Having adequate emergency savings provides you with a sense of stability on such days. It helps you confidently manage a temporary loss of income or an emergency without worrying about money, at least. 

It also helps you avoid unplanned high-interest borrowing that could burden your already stressed budget.

Without adequate emergency funds, it is like living on the edge, hoping and praying that you don't run into a crisis. (Because you cannot afford it)

How much is adequate?

It would be useful to have at least 3 - 6 months' income as emergency savings.  

I have attached an emergency funds savings calculator to the Networth template we used yesterday. You can click here to download it, if you are yet complete the Day 2 task.

Where to keep the emergency funds?

Ideally, all your emergency savings should be in cash or near cash liquid assets. You should be able to access all or most of the funds in less than 24-36 hours.

You can consider one or more of the following for holding your emergency funds;

1. Savings Accounts
2. E-saver accounts 
3. National Bonds 
4. Term deposits
5. Money Market Funds
6. Considering raising interest rates, you can save a portion of the money in sovereign bonds. 

When (not) to use it?

There could be instances when you will be tempted to use these funds for something that seems urgent and important, like;

• Paying Off Debt
• Downpayment on a car or home
• Vacation
• Rent, School, or College Fees.

Avoiding such temptation and keeping this money only for emergencies is crucial. 

The task for Day 3

Today's task is to take stock of your emergency savings. Check if they are in liquid assets. Also, check if they are adequate by using the Emergency funds savings calculator on the Networth Template. 

Thanks again for participating in the 30-Day Win With Money Challenge. See you tomorrow for an exciting and useful activity.