Before diving into Bitcoin, I always set aside some money for an emergency fund, and it's been incredibly helpful and effective when I really need it. We never know what the future holds, when we might run out of money, and having an emergency fund can help us overcome any financial challenges we face.
And after diving into Bitcoin, my long-standing emergency fund plays a crucial role in my investments. I immediately set aside money for my emergency fund after prioritizing Bitcoin purchases upon receiving my paycheck and also prioritizing my basic needs. I always do both simultaneously, but the percentage allocated to my emergency fund is smaller than it is to Bitcoin. Everyone has their own strategy for how long or how many months it takes to build an emergency fund, and for me personally, as long as I can achieve both without sacrificing other needs, I think that's much better. I also plan to use my emergency fund for my child's needs, as he will start school in about a year, and I can use my emergency fund for future needs and beyond as much as possible without having to use Bitcoin prematurely.
Is emergency funds not different from the money we need to be servicing our daily household needs which includes those of children? It could be that you project your emergency funds to meant to serve different purposes but that shouldn't be the case but for unforeseen situations that arises. Our emergency funds should be strictly for emergency purposes while we delineate from our salary other funds for daily upkeeps. When our emergency funds serves many purposes it's no more emergency funds as it rightly should be. In knowing how to carve out their differences we can succeed in growing our bitcoin investments without tampering it prematurely.
Let me digress to this very emergency fund using other area like construction industry they have emergency fund otherwise know as unforseen circumstances budget or bill during bill preparation, the purpose is to cover up any emergency that comes up outside the bill that will affect the project within the awarded period, correlating to Bitcoin investment and our savings in Bitcoin it is unwise to refer emergency fund with mere daily feeding or expenditure that can be captured in your bill, a good planner should be able to know certain parameters of what it's expenditure could runs per week, months and even cover it properly in it's budget but still make provisions for that which may come outside it's thinking box or budget as emergency fund or unforseen circumstances, in my opinion I can't agree a fact that money spend on daily feeding and school fees are really emergency it can only be according to the degree to which it occurred but for me, is as a result of improper planing and budgeting. Emergency fund is purely unfortunately circumstances things one can't emerging because school fees, feeding are every day activities that one need cover with a good plan.
Emergency funds for a more clear understanding can be for example when someone had an auto accident and as we all know that accident occurs unexpectedly because no one really plans or knows it will happen, but along the line it just occurred unexpectedly, and the person involved is being rushed to the hospital for an emergency treatment. Now, in this case, this is where your emergency funds comes to play. Instead of selling off your bitcoin holdings to pay for your emergency hospital bill which comes as a result of the auto accident, you can comfortably turn to your emergency funds to sort out the hospital bill. Someone can also fall ill at any point in time and the person can be rushed to the hospital for an emergency treatment and at such you will need some money to settle the bill, that money being used to pay for such treatment in the hospital is referred to as the emergency funds.
Sometimes, emergency can occur as a result of death or the lost of a loved one and we know there are some part of the world where a lot of money is being spent to conduct a funeral service or burial. This is also where your emergency funds comes to play.