Building An Emergency Fund

Establishing an emergency fund and contributing to it should be seen as a goal independent of your other savings.

- Schalk Louw

One of the most fascinating animals I have come across in my life is the northern short-tailed shrew. It must be one of the cutest little animals to walk the planet. It’s not its looks that make it so fascinating, but rather its “saving habits”, or more specifically, its “emergency fund”.

Its primary food source is insect larvae, but what I didn’t know, is that its saliva contains a type of venom that paralyses its prey. This venom makes the prey comatose, after which it drags it to its nest to feed on later. Because the shrew doesn’t know if its current circumstances will continue to guarantee the availability of food in the near future, it can keep the sedated prey alive for days, and even weeks, if required. If the prey wakes up before the shrew is ready to eat it, it simply bites it again to put it back to sleep.

As human beings, we are facing the same uncertainty, and I would like to emphasise the word uncertainty, as Covid-19 is the perfect example of the type of uncertainty I am referring to. While many people have lost their jobs, there are also countless others who are still employed, but due to current circumstances, they are either only earning a fraction of their usual salary, or no salary at all. Yes, emergency measures have been put in place in the form of the UIF’s Temporary Employer-Employee Relief Scheme during Covid-19, and in the form of standard UIF outside the scope of Covid-19, but the chances of these individuals actually earning their full usual salary – even with such measures in place – are fairly slim.