How to Build an Emergency Fund
Does it concern you that you don’t have an emergency fund? If so, it’s not too late to change that! Building an emergency fund can offer you peace of mind as well as the cash you need for a rainy day. Here are 5 ideas to help you easily and efficiently build an emergency fund. Here is how to get started:
1. Set your goals.
Write down what your goal is for your emergency fund. Start low so it feels like something within reach. For example, choose an amount like $500. This would be enough to cover the cost of an appliance if one were to die on you or an unexpected bill.
2. Start with “small change.”
Start your fund by collecting your change. Every time you make a purchase and have change from the transaction, save it. If you find change around the house, store it away and save it. After 30 days, take your change and cash it in. Take the cash and add it to your emergency savings.
3. Go on a week long spending fast.
For one week, vow not to spend money. Instead, pack your lunch. Make your own coffee. Don’t buy any new clothing or entertainment items. Then, take the estimated cost of these items and put it in your fund. For example, if you spend $30 a week on lattes, take that $30 instead and place it in the fund.
4. Set aside 10 – 15% of your weekly income.
When you deposit your paycheck, take 10 – 15% off the top and put it in your emergency fund. It will be easier not to spend it if you don’t even see it in the first place. As you get comfortable with this amount, you can bump it up to 20% or more.
5. Sell what you don’t need.
Do you have a bunch of items around the home you don’t use anymore? Sell them! Ebay, Facebook Buy & Sell groups, Kijiji and Craigslist are a great way to unload unnecessary items. Take the money you make from your sales and add it to your emergency fund.
When you give these tips a try, you can quickly and easily build your emergency fund! Having an emergency fund on hand can help you feel more secure and prepared for the future as well. Give these tips a try and see what you can save. You are sure to be amazed!
What are your tried and true ways to building an emergency fund?