Why Legal Fees Should be Part of Your Financial Emergency Fund

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Everyone talks about having an emergency fund for the usual stuff, which, yeah, it makes a lot of sense. For example, maybe the car refuses to start on Monday morning, so now it needs to be towed and taken to a mechanic, maybe the washing machine dies mid-spin, or the random medical bill that shows up six months late. Yeah, all of these things can realistically happen here. But do you really need a large amount of money for your emergency fund? Well, yeah, you honestly do.

While yeah, there's plenty of emergencies out there where you'll have to dig into your emergency fund, a lot of people forget about legal emergencies. Which, yeah, makes a lot of sense, because no one outright thinks that it will ever happen to them. But if it can potentially happen, well, who knows, maybe it will happen. For example, your landlord out of the blue claims you owe for damages you didn't cause, or your small business client ghosted you right after you delivered the work. Or maybe even an argument over a contract that somehow escalates into “see you in court.”

Yeah, those can quite literally happen to you, and most people don't set money aside for these worst-case scenarios.

Legal Trouble Shows Up When You're Broke

For the most part, legal messes have terrible timing, don't they? They never show up when you've got a little extra in savings. Nope. Basically, they hit right when you're stretched thin, the rent's due, and you just promised yourself no more luxuries for a little while. When it rains, it pours, it seems. It's a little sad to say, but in this situation, money really is power here.

You can't DIY your way out of a legal situation, but at least if you have some money set aside for legal help, it gives you the freedom to hire someone who'll actually protect your interests instead of picking the cheapest option out of desperation.

And no, lawyers aren't all out to empty your wallet (no matter what the tropes are for them). Actually, it's more about being realistic with the whole situation, like having savings ready for reasonable attorney fees means you can afford proper advice without maxing out your credit card (which is something you shouldn't do). But you need to do research, and don't be afraid to ask questions either.

It's Not Paranoia 

Oh yeah, people hear “legal emergency fund” and immediately think, “That'll never happen to me.” But if it can happen, yeah, it very well could and would happen (just you wait).  Life loves to surprise you. One day you're fine, the next you're calling around for legal advice over something you didn't even know could be a legal issue. You could literally try to save someone's life and still get into a legal mess (the Good Samaritan law only goes so far). You could think of this special emergency fund as an insurance policy.

It's About Protecting Your Peace and Wallet

Money can't buy happiness, but it can buy peace of mind, and yeah, that's close enough. So, just knowing you could afford legal help if something went wrong takes away a massive layer of stress. And yeah, there's nothing that feels worse than being stuck in a situation where you need to act but can't afford to, so you absolutely need this safety net!