How to save for emergency fund
Credit to Author: Tempo Desk| Date: Mon, 08 Jul 2019 12:04:35 +0000
MANY people often complain that they do not earn enough money to save up for their emergency funds.
If you are serious in setting up your emergency fund to prepare yourself for unforeseen expenses, I highly suggest that you start with whatever you have. Be willing to start small.
The most important thing is to get started. Some people think that because they only have a small amount to spare, it is not worth setting aside for emergency.
This is not true. As I always say, “The problem is not the income but the person who is managing the income.”
Are you serious in setting up your emergency fund?
Here are seven practical tips to save up for your emergency fund:
- PRIORITIZE IT IN YOUR BUDGET
Treat is as part of your future expenses. Make it part of the priority list when you’re setting your budget. Set aside an envelope where you can put in the money allocated for the emergency fund. Make it non-negotiable.
- AUTO DEDUCTION
This is one of the best ways for you to save for an emergency fund. Have your bank deduct a certain amount of money from your own savings account on a monthly basis. Have them transfer this money to another account, which will serve as their emergency fund.
- CUT DOWN THEIR SPENDING BUDGET
Take a look at your own spending habits. Where is their money going? To the needs section or to the wants section? Reduce your expenses, especially your wants expenses. Instead of buying something you only want and not need, the goal is to save money. The money you choose not to spend is money that you will save.
- SAVE COINS AND CHANGE
Don’t spend the coins that you have at the end of each day. Each of us in our family have separate coin jars. At the end of the day, let us empty out our pockets into their own respective jars, and once a month, we take them to the bank so they can put their coins into our savings accounts. This can add up to a big amount much faster than you think.
- CASH GIFTS
Whenever you receive Christmas bonuses, birth anniversary money, or some other windfall, don’t let them spend it. Put it directly in the bank. Use it for their emergency fund, and not for shopping.
- GARAGE SALE
Collect old clothes, shoes, books, etc., and set a date for you to sell. This way, you can easily convert the stuff that you are no longer using into cash.
- STAY-CATION
You can also use your vacation budget to set aside money for your emergency fund. Of course, there’s nothing wrong with going on a vacation as a family, but you can choose to go for a stay-cation instead to be able to cut a little bit on cost.
You can enjoy some bonding time with your spouse and kids while watching a movie on DVD. This way, you can build your emergency fund without sacrificing any family time.
I don’t want to prolong this topic any longer because I believe I’ve already achieved my goal with this chapter. My only goal is to create an awareness that we, as breadwinners, need to take emergencies seriously, and we need to set an emergency budget.
After all, I think there is truth to the saying: “PREVENTION is better than CURE.”
THINK. REFLECT. APPLY.
Do you have an emergency fund? Have you ever experienced an emergency before that you did not expect? What happened? How did you handle the situation? What did it cost you?