Another savings? I know this sounds unnecessary at some point. But, emergency funds might save you someday.
You might find yourself neck-deep drowning in your medical bills in the future. So don’t underestimate the urgency of investing in funds like this.
But where to start? No worries, we got you covered.
- Keep track of your monthly income and expenses.
Knowing how much you earn is important in calculating how much you can put in your emergency fund. Make sure to include every spending.
And for the income, only put the take-home pay that you can actually spend.
When you mapped out these two, you can now see if there is remaining money you can put into your emergency funds. Now, if there’s none, it’s time to…
- Set a goal for your emergency fund.
You have to take action. Just always remembers that you are not wasting your money in vain. Financial crisis can happen to anyone and anytime.
So give your future self an assistance. Make a realistic goal for your emergency funds. You can base this on your monthly budgets. Or you can also choose to set aside an amount of money that will go down in this savings.
Either way, making a goal that you can follow up is vital in starting your emergency fund.
And how can you make this goal come to life?
- Earn more.
If you have enough income that only suffices your living, it’s time to earn more money than you need. I know, earning just enough is tough and now you have to earn beyond your needs.
But still, it’s better to earn more than to spend less. So, start stretching that bone and aim for a bigger paycheck right now.
You can also choose to go big and build a business. Nowadays, you can get loans that can help you to start-up. Just remember that you should have a good credit score for your loan to be approved. If you have bad credit, get help from credit repair services. You can check out CreditRepaircompanies.com, an online site dedicated to give you assistance in choosing the right provider.
This way, you cannot be exhausted in squeezing your income for your emergency fund. You can also pool a larger lump of savings in a shorter time.
Sometimes, bigger paycheck and side hustle are not really attainable to some of us. And if you’re one of this, you don’t have to force yourself into this kind of living situation.
- Spend less.
Instead, you can cut back your expenses. If there are things you think you’re wasting your money on, immediately give yourself some love and stop breaking your bank.
And if you’re not sure on what unhealthy habits you should stop, here’s a list:
1.Don’t make shopping as a habit.
This should not come as a shock to you, but treating yourself shopping as a regular routine can hurt your wallet. Instead of doing this habit, you can choose to allocate your shopping money in your emergency fund.
- Lower your bills.
Start living with a more practical utility bill. You don’t need a hundred cable channels to keep you happy. So as much as possible, minimize your use on your utility. This also stays true to your electricity, water and internet bills.
Setting aside money can be a hard thing to do. But in the long run, a go-to fund for emergency can help you in times of need.