5 Reasons Why You Need an Emergency Fund Even in College
It can be tough to save money in college with all the other expenses we have to take care of. Check out the top 5 reasons why you should still have an emergency fund even as a college student.
College is a blur of school, work, friends, homework, and sleep - if you have time for such a thing. If you’re not busy in college, then you must be a rare specimen of sorts. We are so busy in college that we have little time to think about our often non-existent finances. An emergency fund is probably the last thing we think about.
Until we need it.
Even though money is tight in college, an emergency fund is essential and can prove crucial in a time of need. Check out these 5 reasons why you need an emergency fund as a college student.
1) Snap Out of the “Debt is Okay” Mindset
College is expensive. Spending tens of thousands of dollars per year on it adds up quickly. When you’re accumulating that much debt, it can give you a “debt is okay” mindset if you’re not careful.
Bad debt is not okay though. Unnecessary consumer debt is too easy to accumulate in college. It can leave you paying high interest well past your college years.
If you have student loans already, it can be easy to put living expenses and everyday things on credit as well. Student loans in the thousands can make people numb to the smaller expenses that come up. These smaller expenses like food or car repairs can add up thousands more to the debt over time if not careful.
Debt is okay for student loans in certain circumstances. However, it isn’t okay for other living expenses.
2) Health Emergencies
If you’re a college student and don’t have health insurance from your parents, then an emergency fund is especially crucial.
It’s true we’re typically young while in college. But, that doesn’t mean that our appendix can’t explode or we break a leg while showing off to our friends.
Medical bills aren’t cheap, and a simple check-up can cost over $100. Keeping an emergency fund set aside for health emergencies will give you more peace of mind in case anything unfortunate happens.
3) Random Car Expenses
Let’s face it. If you’re in college, you probably have an old, beater car. I do. My car Maxi is a 1995 Nissan Maxima with 213,000 miles on her :)
Even if you have a newer car, random crap can still happen that can cost a pretty penny. Exhibit A.
This is my wife’s rear windshield that just completely shattered this week. It’s a 2012 Chevy with only 50,000 miles. It was parked outside in her work parking lot when somehow it spontaneously shattered! Nothing hit it, there was no foul play. It’s just one of those fun curveballs that life throws at you.
We found out that defroster circuit malfunctioned and caused it to overheat and shatter. Luckily, no one was inside the car while it happened.
Unfortunately, insurance didn’t cover the repair, so we had to pay a little over $400 out of pocket to cover it. It was entirely unexpected. I thought we would have to spend money on my beater car before doing any repairs on our newer car.
If we didn’t have an emergency fund, then I don’t know where we would have gotten the money to cover the windshield.
4) Family Emergencies
If you’re away at college then chances are you’re at least a few hours from your immediate family. You might even be in a different state and fly to get home for holidays and breaks.
Emergencies don’t wait for midterms or finals to be over. They can happen at any time and if you need to go home for any reason then you need an emergency fund.
Plane tickets can be several hundred dollars for domestic flights – sometimes more if you need a ticket ASAP. Be ready for the unexpected by having an emergency fund stashed away.
5) Build Good Habits for Life
If we can build good money habits in college while we’re dirt poor, then these habits will continue for life.
If you have an emergency fund now while surviving off of Ramen and PB & J sandwiches, then you’re set! Maintaining this habit will follow you after graduation. Practice the habits now, before you learn the lesson the hard way.
There’s enough to worry about while we’re in college. Do yourself a favor and set aside an emergency fund. If you can get $1,000 set aside, then you will protect yourself from unexpected surprises.