‘Life is but a bunch of unwanted surprises’: Singaporean says having an emergency fund helps him stay calm

SINGAPORE: A Singaporean man has shared that one of the biggest sources of peace in his life these days is, quite simply, having a solid emergency fund.

With layoffs continuing to make headlines and the job market proving increasingly uncertain, he said knowing he has money set aside for a rainy day has given him a sense of financial and psychological security that no investment could quite replicate.

Writing on the r/singaporefi subreddit, the man reflected on his own financial journey, saying he had experienced everything from “financial ruin (in consumer debt)” to gradually rebuilding his finances in his early adult years and eventually becoming “quite financially stable”.

Looking back, he said one of the most underrated forms of financial security is not necessarily finding the next big investment opportunity but having enough cash set aside for backup.

“We get swept away by the next big thing to invest in, whether it be AI stocks, crypto, Pokémon cards, watches, you name it. But the one thing that is completely underrated is simply being debt-free (consumer debt) and having an emergency fund (aka take-away anxiety money).”

“Life is but a bunch of unwanted surprises; it is genuinely nice to know that you have a pot of gold specifically to deal with the vicissitudes of life.”

In the thread, many commenters agreed with the post author, sharing that having an emergency fund had also given them a greater sense of peace and security.

One said, “Legit. My emergency fund has been a true peacemaker for me. Like just looking at that safety net has me not so stressed.”

Another wrote, “Same here, bro. I cleared my debts. And I have a small mid-5-figure as a base. I never felt so free in my life.”

How big should your emergency fund be?

Most financial advisers recommend keeping around three to six months’ worth of essential living expenses in an emergency fund. The right amount varies, though, depending on factors such as how stable your income is, how much your monthly expenses are, and, of course, how quickly you can secure another job if you get laid off.

The fund should also remain readily accessible, preferably in an interest-bearing savings account or other low-risk cash account, rather than investments that may fluctuate in value or take time to liquidate.

After all, the purpose of an emergency fund is not to maximise returns. It’s about making sure that when life throws an expensive curveball at you (as it eventually will), you’ve got something to fall back on.

Read also: SG worker says he ‘lowkey hopes to get retrenched’ as rumours emerge of reduced packages or even PIP in next layoff round