November 29, 2018 | Article

In life, unexpected situations arise. With these twists and turns that life throws at you, more often than not, they come with a toll on your wallet and finances. You may have to make an unexpected trip to the vet to help your four-legged friend, or you could get into a finder binder and need additional money for car repairs. Regardless of the reason behind the need for those emergency funds, you wouldn’t want your clients to be in a place where they don’t have easily accessible funds to repay those bills. With that being said, what amount is “enough”?

Each amount that would be “enough” is situational to your client. It would be a great idea to sit down with your clients to chat about how much they’re comfortable setting aside for emergency situations, and go through their recurring expenses to further determine that dollar amount. Some clients may need more than others – and it could even come down to how much they want to have prepared to have peace-of-mind.

For instance, if your client has a family, they should have a higher base for their emergency fund in case something were to happen like multiple kids getting sick. Since many of your clients likely have a family to look out for, it’s safer to have a larger emergency fund so the day-to-day expenses won’t be affected. Similarly, if your client is in a role where their income is largely commission-based, they should also have a higher emergency fund. That way, in case they find themselves in a slow month of commissions, they won’t have to worry about bills stacking up.

Needless to say, it’s important to have a plan and emergency funds in place to minimize the long-term financial damage. Helping your clients create an emergency fund shows that you’re thinking of them and that you want to help them stay on track to meet their financial goals. Whatever the fitting amount for each client is, it’s always good to plan for those “just in-case” moments. How will you help your clients create a financial plan for worst-case, emergency scenarios?

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