Ensuring your own safety and that of the whole family is something very important, isn’t it? Creating a financial reserve is the first step for you to have peace of mind and comfort in the face of any unforeseen situation in your daily life.
Through it, you can have time to circumvent complicated occasions such as accidents, illness, unemployment, and any other case that may affect your finances. This means that if there is any unforeseen, you will have enough income to keep your bills up to date and preserve your assets.
Want to know more about what an emergency reserve is and how important it is, keep reading this post and check out our tips!
What is a financial reserve?
As the name suggests, an emergency reserve is a money intended for unforeseen circumstances. In practice, it works like a savings account, which you keep overtime to pay your expenses in unexpected situations. It works as a protection for urgent cases and allows you to maintain your lifestyle until everything returns to normal.
So that it can meet your needs at any time, it is necessary to ensure some issues. First, this reserve needs to have a considerable amount of money, after all, unforeseen events can have high costs.
Secondly, this amount must always be at your disposal, so it is important to leave it in a daily liquidity application, that is, that you can withdraw as soon as you need it. Finally, your financial reserve needs to be with an institution without bureaucracy, which does not delay in providing the amount you need.
What is the ideal value of the financial reserve?
The creation of an emergency reserve is associated with the lifestyle of each one, therefore, it is necessary to consider the particularities of the work models.
CLT employee
The CLT regime represents the reality of millions of people. For those who work in this modality, the ideal is that the reserve is equivalent to at least one year of fixed costs. So, if your monthly expenses are equivalent to 1 thousand reais, it is important to have 12 thousand reais at your disposal. Here, you need to consider all recurring monthly expenses, such as rent, fuel, internet, food, etc., ok?
Public Agent
Those who work in the public service have more predictability of income and job stability, so the need for the emergency reserve is less. Even so, it is recommended to keep at least 6 months of fixed costs covered by these savings. So, if your monthly cost is 1,000, it’s worth having at least 6,000 in reserve.
Entrepreneur
For those who are in charge of their own business, the rules for an emergency reserve depend directly on the entrepreneurial reality. Is your business consolidated? Does the company generate steady profits? Is there any revenue forecast for the next few months?
If the answers are “yes”, you can afford to have a reserve equivalent to just 6 months of fixed costs. For those who run companies at the beginning of their journey, which has not yet established themselves and face large fluctuations, the rule of one year of entries is valid. Thus, it is possible to ensure financial security while the business does not establish itself in the market.
What should the financial reserve be used for?
You know those situations you can’t predict? It is for this type of case that the emergency reserve is made. For example, imagine if there is a leak in your house and you need money for yesterday in order to get everything in order.
Another situation: you get sick and you have to buy an expensive medicine to treat and get a tight and strong back. It’s for occasions like these—when you can’t quite put your finger on the tip of your family’s financial plan —that the reserve comes in handy.
How to save?
How about starting to save and build your reservation today? With the tips listed below, it gets easier. With them and a little effort, you’ll soon have money saved for occasions like the ones specified above. See more.
Make a financial plan
Planning is fundamental to everything, isn’t it? It is therefore worth putting your goals and objectives on paper to start your financial reserve. In addition, it is important to understand how your expenses and earnings.
With this simple action, you can already know what fits or doesn’t fit in your pocket. In your planning, it is important to set aside an income for fun, because no one is made of iron. Thus, it is possible to have more security and fun moments with your family, without extrapolating your budget.
Control your finances
Have you ever used a notebook to write down everything you’re spending? This financial control is valid and helps a lot when saving and building your emergency reserve. With it, you understand how much you earn and where your money is going.
Nowadays, it is also possible to rely on technology and do this management from the palm of the hand. There are lots of free apps that help you stay in control and save money. The good old spreadsheet is also an alternative that can help a lot.
Avoid impulse purchases
With financial control, you identify which expenses are made unnecessarily. With awareness, prevent them from happening and save money to keep your financial health up to date and achieve your goals.
When making a purchase, it is worth asking yourself: “Does this really make a difference if I buy or is it just a consumer impulse?
Thanks for reading this article by ExtNext, hope you will learn something about financial reserves
