Halal finance expert Hejaz Financial Services weighs in on the importance of an emergency fund and how much should be set aside
Every individual, regardless of their financial situation, age or background, is strongly encouraged to set aside a portion of their savings in an emergency fund. Unexpected bills, loss of income and other surprise expenses can often leave unprepared individuals scrambling for funds or winding up in debt. Leading Islam finance provider Hejaz Financial Services reveals why an emergency fund is essential and their top advice for financial planning for an emergency.
According to Halal home loan expert Hejaz Financial Services, research has revealed that 21% of Australian households have reported having less than $1,000 in cash savings. The same research shows that nearly a quarter of Australian households report that they would only be able to maintain their current lifestyle for approximately a month if they suddenly lost their income; 11% of households would only sustain their lifestyle for a mere two weeks.
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The amount needed in an emergency fund differs between individuals or households and is dependent on a number of factors: lifestyle, current savings, income, recurring expenses and more will impact the amount a person will need in their emergency fund. Hejaz Financial Services suggests individuals calculate their current amount of savings, their expected income over the next year and their likely expenses over that same period of time. This will provide a comprehensive, accurate view of their financial situation. The Sharia loans expert informs Australians that setting aside three to six months’ worth of living expenses will provide a good place to start.
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Building up an emergency fund often takes discipline and time, especially for individuals starting from scratch. Hejaz Financial Services recommends breaking down the goal amount into achievable goals: forfeiting a takeaway coffee a few times a week and investing the money into savings instead, putting aside a set amount of each paycheque or focusing any secondary streams of income into savings.
Islamic finance leaders Hejaz Financial Services offers a full suite of Sharia-compliant financial services from Halal loans to savings plans and everything in between. Contact them to find out more about their services today.
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