In as much as no one is praying for emergency, it cannot but happen once in a while. There are some emergencies that pop up like sickness, car breakdown that would need repair, job loss, home repairs-it could be furniture, electronics, sewage, water pipe repairs etc.
To be able to be abreast when these emergencies show up, you need to be able to handle your financial situations. You can only do that when you have an emergency fund.
Here are 6 easy ways you can start an emergency fund:
1. Decide How Much You’d Like to Save.
You need to decide how much you can put apart every month. Ask yourself how much you would need to have tucked away to feel secure, and make that the amount that you save in your emergency fund.
2. Calculate Your Monthly Expenses.
Make a list of all of your regular monthly expenses—housing costs, food, utilities, debt repayments, transportation costs, insurance and all of your other “must-pay” bills.
3. Open an Account.
Once you’ve determined how much you need to save, it’s time to decide where you’ll keep your money. Since you want your emergency fund to remain fairly accessible. Savings account will give you the liquidity that you need, while still earning you some interest.
4. Determine How Much You Can Afford to Save.
If you’re like most people, it’s going to take time to build up your emergency fund, probably even a lot of time. That’s okay. The important thing is that you get started today. Look over your finances, and determine how much you can afford to put towards your emergency fund each month.
5. Set up Automatic Deposits.
Make saving easy by scheduling automatic deposits to your emergency fund. Then, sit back and watch as the balance grows month-after-month.
6. Find Ways to Boost Your Savings Efforts.
Turn a creative eye on your finances, and you’re bound to find ways to reach your savings goal faster.
If you can follow these simple steps, you would find your emergency fund box growing bigger and fatter everyday.