Unfortunately, life cannot be planned out perfectly. Too often we see this happen when people come into our office with problems that could not have been predicted. Life happens, from your pet getting sick to losing your job, emergencies pop up and they are often costly. The beauty of having an emergency fund is being prepared for when those unexpected emergencies (and expenses) happen.
Make Saving A Priority
The journey of beginning your emergency fund starts when you make a commitment to saving money. Your motivation to save is what will ultimately bring you success or failure, and if you make saving a priority, no emergency is going to stop you.
To start, set up a separate savings account for your emergency fund. Every time you receive your paycheck, try to get in the habit of immediately adding a little bit of money into that account. Having a separate account is an excellent way to help with temptation that may arise to spend your money. By separating your savings account from your others, you will be less likely to spend that money because you know it has been put there for a good reason.
Set A Savings Goal
Most financial advisors recommend saving anywhere from 3-6 months’ worth of expenses (some even recommend 8-12). It is important to do save whatever is comfortable for you and affordable within your budget. Then, start adding a little bit to your fund whenever you can. It can be as little as ten dollars a week to as large as one hundred dollars a month. But, it is important to make a habit to add whatever you can to your fund, and regularly.
If you want to reach your goal quickly, estimate how much you can live on (we are talking just the necessities) until you reach your goal. Get creative on ways to make more money or save money. This could mean selling some of your old stuff that you don’t use, picking up a second job, or cutting out unnecessary luxury expenses.
It Won’t Happen Overnight
It is important to remember that your emergency fund will not grow overnight. That’s okay. Focus on creating the habits that will contribute to your success. It takes time, but soon you will find your little emergency fund has grown to become a great safety net.
To learn more about savings, financial freedom, and bankruptcy, contact Citizen’s Law Group today to speak with an expert from our legal team.