There are a lot of ways that homeowners have the benefit over renters. Homeowners can grow their wealth through owning property, don’t have to answer to a landlord, and can set their own rules for living in their own space. But as a renter your major advantage comes in one area – cost. It is simply much cheaper to rent than own the same exact home or apartment. But just because you are saving some money doesn’t mean you can get away without emergency savings. Here are a few reasons why you need an emergency fund as a renter.
The first reason why all renters need an emergency fund is because it will make sure that your rent is paid every month. Paying your rent on time every single month is one of the requirements for leasing an apartment, but having that money isn’t always easy. Having an emergency fund can ensure that in months where it is difficult to get the money together you have a backup source to keep your bills paid on time. You should start by keeping at least one or two months of bills in your emergency fund as the bare minimum.
One of the unfortunate truths about renting is that you are going to be moving much more frequently than owners, as rent costs can increase by a lot year on year, leaving you with no choice but to move somewhere affordable. Power Finances Texas reminds us that moving involves all kinds of expenses you might not think about. This includes boxes, packaging, moving trucks or truck rentals, and the time it takes to move yourself If you take that approach. Having some emergency savings means you can move whenever you have to without financial struggles.
The final, and most obvious reason, that renters need an emergency fund is for emergencies when they come up. Emergency funds are for the unforeseen costs from accidents or other unexpected events. Whether you rent your apartment or live in a home, emergencies can and will happen to you. Vanguard suggests keeping 3 to 6 months of living expenses available for these kinds of emergencies. Having a fund is a crucial step to take to protect your financial well-being, no matter who you are or what age you are.
Having an emergency fund is a crucial step for anyone. Most often you hear of homeowners saving emergency funds, but renters need one too. With reasons like these, everyone should have an emergency fund whether they rent or not.
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