Why Is A Contingency Fund So Important?

Written by Emmanuel Surendra

Life is full of unexpected surprises, and not all of them pleasant. A car repair, sudden illness and unemployment can catch you off-guard and leave you financially stranded.

Having a contingency fund can help you weather these unfavourable situations should they occur.

Unfortunately, many Malaysians are not sufficiently equipped for these challenges. A 2012 Financial Literacy Barometer survey conducted by Visa involving over 900 participants in Malaysia showed that one in five respondents had no savings at all, and over 70% cannot get through a personal emergency of over three months.

That’s pretty alarming, considering that disaster can strike anytime. Not convinced? Here are a few surprises that should motivate you to start or add to a contingency fund: