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Do you live paycheck to paycheck? Has your car broken down and you didn’t have the money to fix it? Have you had an unexpected expenses pop up and you were not able to pay it? Well you are not alone as many of us have had the same experiences that you have had with no emergency funds, it’s how we handle them that makes us a better person for it.
Have you often wondered what would have happened if you had an emergency fund account that you were able to access when your car broke down or that utility bill was extra high this month? Well it can happen, but with a few tips, some consistency, and some discipline on your part the next time that your car breaks down or another unexpected expense pops up remember that a few dollars a day over a period of time could have paid for this.
As a lot of people are living paycheck to paycheck some find the need to have an emergency fund available to them as emergencies arise. As most of us find this task very difficult to achieve it can be done with a few cut backs on your part and even your family can assist you in by cutting back on any extras that they don’t need. It is good idea to have an emergency fund available to you that can pay for a few months of your expenses. I know that sounds like a lot of money, but in time in can be done and just as little as a few dollars a day. As many of us will have unexpected expenses like our car breaking down or your water heater goes out in your house.
Having an emergency fund can be very easy to start, but the most important factor is to be consistent. Setting a certain amount of money aside every week or every paycheck can truly lead to an emergency fund that can some day save your car.
Once you start putting away towards your emergency fund make sure the funds are not readily available to you as the temptation could be greater than you realize. As most people are living on a tight budget and find it hard to set aside any money for their emergency fund but in the long run it will be worth it. If you are able to set aside $25 - $50 per paycheck this would be a great place to start your emergency fund.
Some have stated that you might want to treat your emergency fund as another bill that you have to pay. Program your brain to making this payment towards your emergency fund and you might find it easier to manage.
As many of us know that setting aside money for our emergency fund can be a very difficult task, but when you are saving for your retirement which is called a 401K this money is taken out before taxes and it put directly into another account. This is also another way to put extra money aside and not even miss it. You can compare this to your emergency fund and treat it the same way.
Having an easy access to your emergency fund can be difficult to avoid and not having easy access can both be trying and difficult to avoid. So when you are ready to start your emergency fund make it an account that is something that is not easily accessed by your and/or your spouse.
When bills come up or your kids might want something it is so easy to justify the need and if you have an easy access to your emergency funds there is a more likelihood that you will succumb to the desire of just taking a few dollars out of your emergency fund. Your emergency fund account truly needs to be just that, for emergencies only.
If you don’t see the funds the likelihood that you won’t miss it can only benefit your emergency fund to grow over a period of time and before you know it your emergency fund will have more than you realize.
As your emergency fund grows you might want to start thinking about putting some or all of it into a money market account. Earning some interest on your emergency fund can benefit you if you stick to the plan. When you have at least one month of emergency funds you might want to put it on a one-month CD. When the time that the CD matures you can roll it over to another one-month CD. If you are not sure about your options or what to do about your emergency fund you can always talk to your bank. They are a great resource to have in assisting you in growing your emergency funds.
As you get more money in your emergency fund you might think about a money market account. There are many accounts and CDs to invest in for a short time, so you are able to grow your emergency fund account. Doing a little bit of research and asking family and friends in how they invest some of their money is a great way to start growing your emergency fund account.
Remember the first step with getting an emergency fund started is being aware of your financial expenditures and stop the wanting purchases as this can deter you from your goal of having an emergency fund available to you when you need it the most. Do you have the need to have an emergency fund account? As most will state yes, the first place to start is to find out where your current money is going now. By finding out exactly where your money is currently going can give you a great place to start in finding out how much you can truly set aside for your emergency fund account. |
