We all may like to believe that we are invincible and nothing bad will ever happen to us. Unfortunately hard times befall us all; whether this is something like a catastrophic injury, family crisis, or something even more common like a layoff or cutback in hours; whatever it is you need to be prepared. Establishing and maintaining an “emergency fund” is a really smart way to mitigate the effects of this. But what should your emergency fund contain? What are essential components to your emergency fund? What constitutes an “emergency”? If you haven’t thought of these questions before and others, it would be wise to do so.

Emergency: You might think that there are several emergencies which happen every day. But unless you are a high ranking secret service agent with high clearance or a police dispatcher or something like that, your emergencies probably don’t rise to the level of being “fund worthy.” Certain emergencies include things like pregnancy complications, death in the family, or being given the pink slip; these are all things which would be worthy of your taking withdrawals from your emergency fund.

Components: You may think ‘that’s great,’ but what does this mythic fund have to have in it so that it will serve you well in a crisis situation? What are the basic human needs? It’s food, water, air, shelter. You should be covered on the air component but then what about the rest? When you are in a crisis situation there can be nothing worse than getting an eviction notice for lack of payment. What’s worse may be a foreclosure. You may think that this is something that would never happen to you, but this is why you are creating an emergency fund. A full list of things to consider includes:
• Shelter: You need a place to live; that is a given. Setting aside a good deal of funds for your home expenses, rent, mortgage, taxes and other home maintenance should be on of your main areas of savings. Many people fail to budget properly for home maintenance and pay the price for it. Imagine all of the things that could happen to your home and what they would cost to fix. For instance, live in a rural area? The cost for getting a squirrel removed from your attic could be as high as $1,500.

• Food: Another thing you are going to have to continue to pay for is your food. Eating is not an “option.” Moreover if you begin grabbing fast food to go you are only hurting your own health in the long run. Isn’t it better to get into a routine which flows around your crisis for eating and such? Folks who are close with you will appreciate your struggle for normalcy even when the rest of the world had gone crazy.

• Medical Care: This one can be a little loaded because your emergency may revolve around some type of a medical issue. Even if that is not the case you are going to need to have monies set aside for things like regular care, glasses, inhalers, vaccinations and other regular medical care that you and your family would need.

These are just the basics for your emergency fund. You are going to need to have money set aside for things like cash to get around, car maintenance, and any other unforeseen expenses you may have during a crisis. This money will also have to last you for the duration of whatever crisis it is that is going on, so you shouldn’t be stingy. Hopefully you’ll never use this and it will just add to your personal family fortune.