If you are lucky, you have never had to tap into an emergency money fund. If you are smart, however, you have an emergency fund.
For the times when bad luck might strike, having a significant amount of money saved up to get you through the hardship can save you from further financial struggle down the road. Say, for example, someone gets sick or injured and has medical bills to pay. Not having any money in a "rainy-day fund" somewhere can lead to the reliance on credit.
Using credit cards is not a bad thing, though it depends on how credit cards are used and paid off. Credit can get people through an expensive, emergency situation, but if the funds simply aren't there to pay off that debt, then a one-time emergency can become an ongoing life stress.
A Forbes article about emergency funds highlights a notable point: men are more likely than women to have emergency savings in place. A survey indicates that 43 percent of middle-aged women and 63 percent of middle-aged men have emergency funds.
These statistics would suggest that the women are at higher risk of having to build up credit card debt or borrow money elsewhere. The reasons why there seems to be a discrepancy in savings trends between men and women are not provided. One point is the same for anyone, no matter their gender. Life is full of surprises, and those surprises -- good and bad -- can be costly.
When a surprise leads to debt and someone just cannot seem to pay it down, or maybe even a further expensive surprise adds more to that initial debt, a rainy-day fund might not cut it. Legal avenues might be the best way out of an unpredictable situation. A bankruptcy attorney could look at the details of a person's case and explain what the legal options could be.
Forbes, "Women Need To Get Serious About Emergency Savings," Kerry Hannon, Aug. 28, 2013