You Need Good Story to Save Emergency Fund
Having an emergency fund is crucial and we could call it even a necessity after COVID-19.
But why do we know it is so important but still struggle to establish an emergency fund?
According to the Financial Education Network [FENetwork], many Malaysians find it more difficult to face unexpected life events. Around half (52%) of Malaysians struggle to raise emergency funds of RM1,000 or more. It’s also been found that only a quarter (24%) are able to sustain living expenses for at least three months if they lose their main source of income.
Resource: HSBC MY
I am reading Same as Ever by Morgan Housel recently, and one of the chapters — Best Story Wins said it all.
This applies in saving emergency funds too. If I told you that you need to have at least a 6 months emergency fund, there is a very high chance that you probably won’t do it.
But what If I begin with a story:-
My Layoff Story
On one of the mornings in November 2022, I woke up in the morning and prepared myself as usual.
Just when I am trying to turn on my Slack, I get a notice that the account was deactivated without any prior notice. A few hours later, we got a reporter news that our company was doing a layoff and this was pretty shocking.
But I was calmer than I thought when I heard about the layoff, I even reached out to my superior and asked them to let me do a proper handover so whoever took over the project wouldn’t feel overwhelmed.
What made me calm?
- The emergency fund I have, I knew that I had a few months of emergency funds and that I am still able to feed my wife and newborn.
- The emergency fund also prevented me from making a reckless decision, I could start finding a new job slowly, a job that I am interested in without rushing to make ends meet.
I couldn’t imagine how good/bad it would turn out without any emergency fund. But because of the savings, I wasn’t panicked and I could still be nice to everyone around me.
Trust me! It is very hard to be nice when you don’t have money. Not to say it’s impossible, but it is very hard
