Day to Day life

13 Reasons Why You Might Need Emergency Money


You never really know exactly when you will need emergency money. But most of the time, it’s a necessity of life. And many life events will cause you to dip into your savings. However, there are also unforeseen circumstances like disasters and sudden loss of income to consider.

A Sudden Death in the Family

One of the biggest reasons for needing quick access to money is when someone tragically dies. The cost of funeral arrangements can be astronomical. Typically you need a coffin, embalming, transport, a service and a wake. None of these is free, and the costs quickly add up. At the very least, you’re looking at a few grand. And you might not have access to this kind of money, especially if you have poor credit. However, you can get payday loans for bad credit, and these are invaluable if you have no insurance, funeral plans or savings. But it’s an added expense.

An Act of God Natural Disaster

You can never really know when your home will be hit by a natural disaster. Flooding and wildfires are becoming increasingly common all over the world, as recent events have shown. And the damage can be immeasurable to your home and property. In some cases, your home could be destroyed entirely. And without appropriate insurance, there may be nothing you can do. In short, you could lose your home. And then you need to relocate, with no way of knowing how long you might need to stay in a hotel or rented accommodation. 

You Need Emergency Money Leaving Home

Poverty is the leading cause of homelessness in many countries, including the UK and the USA. Losing your job or income means you can no longer contribute, and this can cause you to be forced out of your home. For instance, you can’t pay your rent in your house or shared flat. Or your change of fortune results in separating from your partner. These are typical cases where you will need to leave your home. But finding somewhere to live can take a while. So emergency funds are required for temporary accommodation like a cheap hotel or hostel.

Loss of Income from Injury

Slips, trips and falls are the most common workplace injuries. And they happen all the time. Depending on the severity of the incident, you could be off work for a long time. 17 days is the average, but some recovery takes much longer. Depending on where you live, you can get help. For example, in the UK, your employer must pay statutory sick pay of £99.35 per week minimum. But this requirement is for 28 weeks only. Anything after this, you must cover yourself. Yet if you are too ill to work, emergency funds become necessary to support your home life.

Unexpected Medical Bills

Medical bills can become astronomical in some countries. The USA is a perfect example, where the average hospital stay costs over $2,500 per day. Brits are lucky with the NHS service that covers costs. However, it doesn’t guarantee all treatments. For example, the NHS may charge for specific back treatments, eye surgery and haemorrhoid removal. There is a long list of things the NHS can charge for. Many of which are related to women’s health. One step forward, eh? So, no matter where you are, you may need emergency funding to fall back on in some cases.

Losing Your Employment

Losing your job is a living nightmare. All of a sudden, you have no income, and your life can get pretty hairy. It can take an average of between three to six months to find a new job. Therefore, you need at least three months equivalent of your pay in your emergency fund to cover you in this event. This isn’t very encouraging when the latest figures state that over 70% of people have less than $1,000 in the bank in the United States alone. And the citizens of most countries are worse off, especially considering the current cost of living crisis we are all facing right now.

A Downturn in Self-Employed Business

Of course, you might rely on your own business for income. While this is a dream for some and can be rewarding, there is a slight uncertainty. Self-employment can be a tricky affair, and you may have variable income rates. However, you can secure your finances as follows:

  • Budget everything so you always know what you really have.
  • Pay yourself a reasonable salary from your income after business expenses.
  • Open a separate account for storing estimated tax money.
  • Deduct business bills from income, such as energy, licenses and software.
  • Research if there are any benefits available for your situation.

Variable business means you can never be 100% sure of your income from week to week. But you can take steps to better security by managing your finances properly. An emergency fund is excellent. But as a business, you should also consider related insurance policies for extra help.

Cosmetic Treatments

You might want cosmetic treatments for all kinds of reasons. And these don’t only relate to making yourself look better. For example, you might need a breast reduction because of the associated health issues of a larger bust. However, this is considered purely cosmetic in most countries, including the UK, except in exceptional circumstances. Therefore, there is a high probability you will have to pay for this yourself. You can also find yourself in need of cosmetic treatments when a body issue causes severe psychological problems due to body image.

An Unexpected Tax Bill

Unfortunately, there’s no way of avoiding taxes. It’s as assured as death, according to the proverb. While even death might be curable in the future, it’s probable taxes will always be around. Many people have trouble paying taxes because it can be complicated, and the government usually offers little help. And an accountant can be an extra expense you can’t afford. Yet even if you are on top of taxes, unexpected or amended bills aren’t uncommon. So you might need to hit your emergency fund to cover what they say you owe.

A Cut in Your Working Hours

You might be lucky enough to keep your job when your employer is downsizing. But you might have to take a hit in available hours. Of course, you can find a part-time job to back them up. But this can take a while. In the meantime, you will likely feel the stress of a sudden drop in income. And this can have a devastating impact on families and is a leading cause of people getting into debt. After all your efforts getting out of debt, you don’t want that again. Therefore, you need an emergency fund you can dip into as required while you try to find more work.

You Need Emergency Money for Transportation

Transportation is a considerable expense for most people. If you own a car, you are pretty much self-reliant. However, your vehicle can suddenly break down, meaning you will need to get it fixed and pay for public transport in the meantime. Yet depending on what needs to be done, repairs can be very expensive. Additionally, public transport costs can add up. And then there’s the possibility of buses and trains being on strike. Meaning you are forced to pay for expensive services like Uber with a base fayre, cost per mile and additional costs per minute.

A Promotion at Work

What? How can a promotion cause me to use emergency money? You might ask. Well, a promotion usually means more money, which is always great. But it’s not uncommon for a relocation to come with it. Sometimes you may need to move to a neighbouring city. Or you may be asked to relocate to another country entirely. In either case, you won’t get your higher paycheck until the month after you start your role. And this can be very expensive. A survey by Barclays bank found that in the UK, the cost of moving home averages around £11,000.

A New Addition to the Family

The greatest joy in life is raising a family, and who doesn’t love a baby? But one thing no one ever tells you is that babies cost a ton of money. It’s expensive enough in the UK, where NHS treatment is free. Yet you have the costs of bringing the baby home. But if you live in the USA, the cost of delivery alone can reach $30,000. And childbirth isn’t usually covered in insurance policies. Moving on, a newborn is likely to cost you over £7,000 in the first year alone and gets more expensive. So savings are essential if you plan on welcoming a new bundle of joy.


Preparing for any eventuality is a great way to avoid or lessen the financial burden of a disaster you didn’t see coming. Some of the most considerable times when you might need emergency money include bereavement, a downturn in business and having a baby.

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