No matter how much we plan in life, we can never plan everything and the unexpected will always occur. Whether that be expensive car repairs, unexpected health problems, a family emergency, or even the loss of your job. All these unexpected occurrences are stressful enough, without having the stress of the money involved too. Times like these, are exactly why an ‘Emergency Fund’ or a ‘Rainy Day Fund’ is crucial.
Can’t I just get credit?
Yes, you can get credit when your rainy day comes, but how much extra stress and pressure do you think that’s going to put on you?
Not only would you then be faced with an unexpected and likely stressful event, you will be faced with further debt too.
Let’s be clear. We’re not saying that you can never get credit again. Things happen and sometimes credit is required. But having an Emergency Fund to cover what you can, will leave you far better off and make you feel a little better too.
How do I save for an Emergency Fund?
Saving for an Emergency Fund can be tricky. Particularly, when the emergency isn’t already in your sights or in the forefront of your mind. “It will never happen to me.” is a phrase we hear many people say.
Here are a few pointers to help:
- Think of it like a bill
When it comes to saving money, your mindset cannot be underestimated. If you think of your Emergency Fund like a bill that you have to pay every month, then this should help.
- Make it automatic
We have enough things in our lives to remember, let alone to save for our Emergency Fund. To ensure you don’t forget, make it automatic. Work out how much you can afford to save each week, or each month (the frequency of which your wages are paid is a good idea) and set up the automatic transfer accordingly.
How much do I need to save for my Emergency Fund?
The secret to building an Emergency Fund is to start small. It doesn’t matter how much, or how little you save, you just need to make a start, and then keep going.
For example, if you save as little as $10 or $20 per week, you’ll have $520 or even $1,040 by the end of the year. That’s the start of a solid amount of savings that will give you some financial breathing space. So, you see, having an Emergency Fund is crucial and it doesn’t have to be as difficult as it sounds.
Ready to relieve some of your financial stress? Start your Emergency Fund today.
Do you have debt you’re struggling to pay? Feel it may be too late for your Emergency Fund?
At Life After Debt® we help those struggling with unmanageable debt; Our team can help you freeze interest, reduce your debt and avoid bankruptcy with affordable, practical financial solutions, proven to relieve hardship. We provide honest and sympathetic advice based on your personal situation. Call us today for your free debt solutions assessment.