When we’re talking about saving money, an emergency fund is definitely critical. An emergency fund is a means that save you from something of unexpected for your badget. Having a good emergency fund is like a self-insurance and an important part for having a healthy financial picture.
Usually, people who haven’t open an emergency fund have a difficult time saving money. For a newbie can be hard to start, but all you need is a shift in mindset.
To solve your problem, here, some easy strategies you can take immediately in consideration:
- Stop getting into debt.
- Reduce your spending by being more frugal.
- Build an emergency fund of $1,000.
Image Credit: Jarod Carruthers
How To Build A Robust Emergency Fund
If you have need of more help, here, some tips to build a robust emergency fund:
1. Start with $20. Despite you don’t have much money to open an emergency fund, don’t worry — the important thing is just to start. Find a high quality savings account with a decent return and put $20 there. Just start.
2. If you get a promotion, setting up an automatic transfer to your emergency fund until the fund grows large enough to accomplish the goal. Remember, don’t throw your money away.
3. In general, Set up an automatic deduction, for example by open an online savings account Emigrant Direct or ING Direct.
4.Every unplanned expense become an emergency, then take note. When your expense grow, add them into your budget. When you want to create an emergency fund you need to expect the unexpected.
5. You need of $1000 to start? Making an inventory of stuff you want to sell. I love creating an list, first because help me purge stuff, and possibly make money by selling it. Another thing you can do if you need of $1000 is to asking for a promotion or find a second job.
6. Having an emergency? Put your other savings goals away, and focus all of your energy on the priority things.
7. If you spend $350 for groceries, then save the difference. For instance, you can spend $400 for groceries, and save all you don’t spend into your saving account.
8. Cut out junk food. If you’re trying to lose weight, don’t buy junk food. Put the amount you would have spent in your saving account.
9. Keep paying debt. Once you paid a smaller debt, take the amount you were paying to that debt and add it into your savings for the next months.
My next goal is to cover all my unexpected problem with an emergency fund of $2000, but is a slow process, and I’m building it 1 small piece at a time.
