Why it is Important to Have an 8 Month Emergency Fund when You Are Working from Home

Working from home is a dream for a lot of people. If you are one of the many that have said good bye to commuting into an office everyday, congratulations! The next and most important question that you are going to have to answer is if you have an 8 month emergency fund setup already. This is about 8 months of your normal living expenses set aside in a savings account that you do not touch for anything but emergencies. If you are like most people, you are shaking your head no to this question.

The world of working from home can be just as volatile if not more then the brick and mortar employment field. Many of the top financial gurus including Suze Orman preach that you need to have an 8 month emergency fund. To be truthful, this is even more important if you are working from home and here is why.

Number One: Emergencies Happen

If we knew of every little bump in the road that is going to happen to us as we go through life, they would not be called emergencies. They would have a much cuter name. The truth is that it is very important to have funds put aside for these unseen future events. This is even more true when you are working from home. Time when the stability of a brick and mortar pay check would be enough to get you by might not work when you are waiting for a client to pay an invoice.

Number Two: Stay Out of Debt

Having an 8 month emergency fund is one of the most important things that you can do to stay out of debt. Many people who venture into the world of work from home, tend to build up a bit of debt when they are first starting out. Waiting for projects to pay and finding new gigs can mean the cash comes in slowly at first. This can make paying bills and buying the necessities tricky unless you have some cash set aside for these troubles.

Number Three: Losing Clients/ Projects

It would be nice if the work was always plentiful when you are working from home, but there will be times when this will not be the case. There are many forums that have people posting that lost a client or project that was their main way of earning out of nowhere. It is a major financial hit. When you have an 8 month emergency fund in place, you can rest easier knowing that if you have these problems that the bills will still get paid.


People also view

Leave a Reply

Your email address will not be published. Required fields are marked *