The culture of financial education has been changing little by little in Brazil. Many Brazilians have already understood that it is important to look for new investments and plan finances to face times of crisis. Thus, the emergency reserve is gaining space and becoming very popular with the citizens of our country.
In this article, we will explain what it is and how to make an emergency reservation. On the other hand, we will show the importance of reserving values to plan for the future and avoid debt. In addition, we will present the main steps on how to save these resources, do an analysis of finances, understand how much you can save monthly and define the necessary investment.
Do you want to understand the importance of having an emergency reserve for difficult times? So continue reading this post and check it out!
Know what an emergency reserve is
Emergencies happen in everyone’s life. Although there are excellent financial plans, there are times when difficulties arise and can catch you off guard. For this reason, some reserve options have been created that provide more security in the face of unpredictability. These alternatives are important and confer benefits to its users.
Emergency reserve, therefore, is a kind of financial planning that can be used in an emergency by people who decide to keep a part of their resources. The values are kept for the purpose of being used if there is a need or difficult moments and help to solve situations that are out of control and leave negative accounts.
Everyday situations are not always predictable, which is why it is not possible to always be completely sure about the future. Homes and automobiles need maintenance, people get sick, urgent trips appear unexpectedly and in this way the emergency reserve becomes the lifeline in difficult times.
Understand the importance of having an emergency reserve
The emergency reserve acts as savings, an investment made by those who aspire to financial independence. As urgent events are unexpected, the stored value supplies sudden and essential expenses, serving as a shield to protect against unforeseen events that demand high amounts for its resolution.
As you can see, the emergency reserve is very important in unusual and difficult situations that occur in our life. These moments can be overcome more quickly if the user has a considerable amount saved to serve this purpose. After all, the most complicated occasions need to be circumvented in some way.
If you do not have a reservation, you may face problems when applying for bank loans, which have very high-interest rates, or you will have to resort to a credit card. Other possibilities may be even more impracticable and bring greater difficulties for those who are already in trouble due to the lack of financial resources. Saving a little money avoids all of that.
The emergency reserve is still interesting for investors with higher risks. Yields can take a long time to make a good return and the amounts invested do not always generate profits, even if the investor has planned everything in detail. For this reason, set aside an amount and make it available in case of need.
See the main steps on how to make an emergency reservation
If you decide to create your emergency reserve, be aware that you will no longer be dependent on loans, financing or other solutions that pose even greater challenges. But, for this, it is necessary to plan to be safe in your decisions, choose the ideal type of investment and know the amount that should be applied. Follow us!
1. Do an analysis of finances
Initially, organize your accounts to avoid spending more than you earn and save money. Map your expenses and profits to understand the real situation of your finances. After analyzing all the aspects, start thinking about a coherent plan and set aside a monthly amount to save or invest.
Try to immediately pay off all debts that are still pending so that they do not become a snowball due to the incidence of interest and fines. Understand that debts give rise to other problems and inconveniences that take the debtors’ peace of mind, so try to eliminate them. Differentiate urgencies from whims so as not to spend on unnecessary things.
2. Understand how much you can save monthly
Set up your family or personal budget to understand how much can be saved each month. Record resource inflows and financial outflows in a spreadsheet or notebook. This habit will allow you to know exactly what amounts will be available to make investments and will allow you to calculate the expenses to be paid.
3. Define the investment to place the emergency reserve
Choose the investment you intend to make to place in your emergency reserve. Consider applications that generate better returns, that have liquidity and that can be redeemed when necessary without imposing financial losses. To choose the product, know its characteristics and find out if they fit your strategy.
Give preference to investments that do not hinder access to resources, because if they are blocked for some time you will not be able to withdraw them in an emergency. Sometimes it is better to have less profit, but not to be prevented from using the values as soon as it is necessary. Look for options that fit your wallet.
4. Make monthly contributions
As soon as you define the amount that will be reserved each month, be sure to make monthly contributions. Do everything in your power to have that amount over at the end of each period, after all, the investment was planned in advance. Always save that amount to achieve your goals.
5. Do not redeem the application
Have the discipline to keep your emergency reserve saved for really urgent situations. You should not redeem the application just because there is an accumulated amount, as it has not been set aside for non-essential purchases. Leave the amount saved to fulfill your purpose.
Anyway, these are the 5 steps by Blue world city on how to make an emergency reservation! Create realistic goals and start saving according to your possibilities. Even if you have small amounts available, invest them and try to increase them progressively to form your emergency fund, which can be useful when you least expect it.