Life can be unpredictable even with a stable job, home and family. For every unpredictable situation comes a requirement for preparation for such occasions. Your preparedness for such difficult times no matter the trouble is what will help you keep you sane. Being financially sorted is probably the biggest blessing one can have when a crisis arises. While not all of us have the blessing, for some of us, it is saving up for such a situation that helps us sail through. So here are a few tips on how to make an emergency fund and to grow it over time.
A cardinal rule you need to follow for emergency funds is that they are untouchable funds to be kept only for unforeseen situations like when your car needs repair or laptop breaks down. They are definitely not meant for a Zara dress you fall in love with or the latest war video game released.
It is pretty easy to build up an emergency fund once you get yourself to siphon off some money from your earning each month to a different account. Be alert enough to do it and you should be able to see any financial danger in the eye, having such transfer automated also helps in case you don’t trust yourself with the responsibility.
If you are wondering how much you should be saving for your emergency fund, then do keep in mind that there is no set formula for it. In case of an unforeseen situation such as loss or job or relocation then your fund should be able to cover yourself for three months in terms of rent, mortgage and other such monthly expenditures. This fund will ensure you survive without having to compromise on food or internet connection.
The biggest utility of an emergency fund is that it lets you breathe stress free, at least relatively stress free. A little calculated savings is all it takes to keep you away from anxiety so build your emergency fund today.