Recently I almost lost my job. This is due to a misunderstanding. Fortunately, the misunderstanding is cleared up and I was able to get my current job. I am not here to talk about what caused that misunderstanding. But I want to about what my backup plan to talk to if I lose my job altogether.
If I promise that I lost my job the first thing I could have to lose just think, in my bills, day after day, mortgages, etc. pay Fortunately insurane from time to time, I have some money for emergency assured. I calculated that I have to live without work for at least six months. I feel a bit relieved. Other money from some of my savings account, I have money in stocks and mutual funds.
I also have some money in my house loan account. For you information my house loan account is the kind of flexible loan payment account. Whenever I pay more, the extra money will be used to reduce my loan principal outstanding. This will reduce the loan interest. But I can still withdraw that extra money out anytime if I need it. I thought this is a very good feature. Every months I will pay extra money to the loan account. I aim to settle the house in less than 5 years. So up to now, I have some decent amount of money in the account. It can be used as my backup emergency funds. At the same time it helps to reduce the interest on my housing loan.
Back to the main topic, I seriously think that we should have some backup funds for emergency purpose. Nowadays Most of people’s financial situation doesn’t even allow them to live for 1 single month if they lose their job. You may think this is not necessary, but wait till you get hit. Then you will know how tough it is. I would say we should have some emergency fund that allow us to live for at least 6 months if we lose our main income.