Emergencies have a funny way of coming along when you least expect them. That’s why it’s essential to put money in an emergency savings account. Having special types of insurance is a great way to guard yourself against some potential risks, however, there are other things that can go wrong in life that are better left to emergency savings to handle.
And while we can’t always be prepared emotionally when life takes us by surprise, we can be prepared monetarily. Here are some of the best tips for putting away an emergency savings fund.
Sometimes people don’t always have the budgets to be able to put away large amounts of savings at a time. Rather than overwhelming yourself with the idea of half of your paycheck going towards savings, start small. Baby steps are a great way to get started putting money aside. Some banks even have a keep the change savings program which saves your money for you. For example, if something costs $12.49, it will round up to the nearest dollar and put the remainder of the transaction into a savings account.
Consider setting up automatic savings that takes your money directly from your account into your savings without you even having to think about it. Set aside a reasonable amount that you can commit to each month and don’t touch that money unless you have a genuine emergency. That way, you don’t have to remind yourself, and you won’t have to worry about not having emergency funds available should something go wrong.
Get a Side Gig
If you have a little extra time in your schedule, you should consider getting a side job. whether it’s ten extra hours a week, or ten extra hours a month, consider dedicating everything you earned from this job to your emergency savings account.
Cut Back Expenses
A lot of people assume that they can’t fit more savings into their budget because they’ve already got too many expenses to pay for as it is. However, you’d be surprised to find that in many cases something as simple as buying a little less something every month is an extremely effective way to free up more of your income for savings. Take a good look at everything you spend your money on each month— chances are there are a few areas that you could probably spend less on. (ahem… yes we’re talking about that Starbucks!) Whether it’s getting rid of a subscription, or canceling that gym membership that you never use, find a few ways to spend just a little less so you can put more towards your emergency savings.
Don’t take the risk of assuming that emergencies could never happen to you. Most people who experience emergencies never saw it coming. However, by staying committed to saving and putting a nice bit of change away, you should be prepared for anything that life throws your way.