subject: How to Create an Emergency Fund [print this page] How to Create an Emergency Fund How to Create an Emergency Fund
How to Create an Emergency Fund
Creating an emergency fund is vital in todays sad jobless economy. Do you want to have some money in your bank account for "those emergency expenses"? If so, read on and learn some steps for a more enjoyable life.
Firstly, do some quick research on how much you can save if you just transfer monthly amounts to your savings. Ah! Savings! The first step is to open a savings account and start transferring money slowly to your savings account. Before that assess how much your making from your main job, and take care of yourself first before moving any big amounts. The next step would be creating a budget from where you can see how much you spend on a daily, weekly, and monthly basis. Write this down on a piece of paper and keep track of your expenses. Keep all your receipts and your paycheck stubs. Once you see how much you spend, from there you can calculate how much you can take out for savings.
Now, the next step would be finding income streams such as multiple jobs, gigs, or paid events. The reason to find more ways to make money is to double your income and double your savings. If you bank, ask your bank to make a withdrawal at the end of each month from your checking to your savings. It can be as small as $10 dollars but after 6 months it would accumulate to $60 dollars. The final step would be to look for change around the house, car, or garage and put it into your savings. What you don't want to do is to put money into money market funds, or stock market, or any other kind of account where you don't have absolute control of the money. Once you develop this little habit you can easily reach $120 dollars each year into your savings and this could in turn be your emergency fund.
