Bad things happen to everyone. When you incur a sudden or unexpected expense that causes you to draw money out of your saving account or require money from other sources you now have a financial emergency to deal with. Usually that financial emergency is caused by some other emergency that costs money to resolve.
Required medical care is one of those emergencies if you suddenly become injured or sick. You could suddenly become a victim of a natural disaster such as a fire, a flood and/or tornado. So too, your mode of transportation might need a costly repair or you might suddenly be faced with having to purchase a used or new motor vehicle. You could also be faced with having to support a relative or loved one who is in need of financial assistance and/or even a place in which to live.
The above examples are the most common sudden financial emergencies that most people have to deal with. Other financial emergencies occur during longer periods of time, such as when you suddenly lose your primary means of employment. You could require extended medical care outside of a hospital or an emergency room which, during a period of time, slowly but surely causes you to become bankrupt and/or several thousands of dollars in debt. In other words, you incur an expense that is ongoing for more than a month or even more than a year or two.
Bad things happen to everyone and you are no different than other people in that regard. Most people have a credit card in which to obtain a short term loan at a moment’s notice. Then again, there are limits to how large a loan you can easily receive by using such a credit card as a means to pay for such a financial emergency, whatever that expense might be.
Wise people who can afford to do so usually save a certain amount of their current income for their eventual retirement or for some sudden and unexpected expense. A homeowner might have to replace an appliance or even a heating system at a moment’s notice. A new furnace costs big money to purchase and have installed within any home. Few, if any, homeowners have the ready cash available to simply pay for such an item.
As you can see, it is really easy to incur a large amount of credit card debt or debts to vendors who allow you to make monthly payments for those expensive items that cost more than your current income. Being a wise consumer you do your best to live within your financial means.
You know full well that overspending leads to bankruptcy within the future. Therefore, as you make your way in life you provide for those bad things that will happen to you in the long term and/or the short term for as long as you are alive. That is called: “Being a responsible and contributing member of the society in which you live.”