I can’t begin to tell you how many people I’ve heard say you should keep one credit card on hand in case of emergencies. I even bought into that idea myself early on, getting a credit card that would “only be used for emergencies”. (Who knew that ordering a pizza would feel like an emergency one day?)
But you know what? Debt is not a safety net.
Debt is a trap. A trap that it’s all to easy to become tangled up in.
Why debt makes things worse
Getting (or keeping) a credit card to use in case of an emergency isn’t the answer. That’d be like keeping one really sharp knife handy if you were afraid of getting cut (instead of a supply of bandages.)
If you have an emergency, you don’t need to make your situation even worse by borrowing money and putting yourself in financial trouble. Why increase your stress and make financial disaster more likely?
What you need is a real safety net: money.
You need an emergency fund, not an emergency card
Building and maintaining an emergency fund is critical to keeping your finances running smoothly. So you need one, stat.
When you’re in full-on debt payoff mode, you might decide to temporarily limit the size of your fund so you can put as much as possible toward your debt. (For example, you might want to start out with a $1,000 emergency fund.) Eventually though, you’ll want to have a fully-funded emergency fund. (I keep a year’s worth of living expenses on hand in case of job loss or medical issues.)
If building an emergency fund sounds impossible to you, remember this: we’ve all got to start somewhere. If you’re living hand to mouth — so that you don’t have any extra money at all leftover to set aside for emergencies — it’s time to sell some stuff to get one started, take on an extra job, reduce your expenses, or all three.
Build your true safety net
No one gets through life without experiencing one or more emergencies, so unfortunately it’s just a matter of time until you’re hit with one too. Better to make the sacrifices now so that you can build a true safety net, than to be hit with even more stress and anxiety later when you’re hit with an emergency you haven’t prepared for.
Remember, debt is not a safety net. MONEY is.
Get started on building your emergency fund today.