The importance of an emergency fund cannot be overemphasized. It is useful when situations arise where urgent cash is required. However to some, especially those living from one paycheque to paycheque, building this fund can be a hard task. This article will help you with some tips on how you could build an emergency fund from the scratch.
Have a coin jar
We normally get some change from the supermarket or other places where we shop. Often we do not account for this money, as some of it gets lost in the house or in the car. The amount could be enough to start an emergency fund; all we have to do is have a coin jar where we put all the loose change. You will be surprised by the amount in the jar at the end of the month. This is money that was going to waste but now through collecting it together we have an amount we can build on, creating a fund which can help us during an emergency.
Sell some stuff
If you look around your house, there are things that have been lying around, unused for a long time. If you sell them you could make an amount that is enough to build an emergency fund. Don’t wait until you have an emergency to sell things, selling them beforehand might get you better prices, as when you sell during an emergency, you will be forced to take the offered prices. Also with disposing off some of these items you are helping declutter your house.
Buy from discount stores
Even if you are living from one paycheck to another, you can save on what you spend for your monthly purchases. Make a habit of shopping in discount stores; with this you’ll be able to save some money. Use the amount saved to start an emergency fund. If you make this a habit, by the end of the year, you will have accumulated a substantial amount for emergency purposes.
Cut on spending
Luxuries may be using some of the money that should be going towards saving. By using alternatives such as running outdoors, subscribing to lower priced TV and internet services, you could cut some expenses such as gym memberships and television and internet subscriptions. You will find that each month you’ll save and those savings can help build an emergency fund.
Building an emergency fund should be a priority; it makes a difference when we are in a situation that requires urgent cash. Hopefully these tips might help you achieve this.
Disclaimer: The above information is general in nature and not intended to be financial advice. You should consider seeking professional advice before following any suggestions in this blog/website.