Have you got an emergency savings fund? Don’t panic if you don’t. It may shock you to know that almost half of all working adults do not have a backup account to cover their bills should something go wrong. If your refrigerator broke down, or your car broke down, or you fell ill and lost your job, what would you do to cover yourself?
The answer to that is that right now, you need to plan an emergency savings account. Anything in life could really hit you out of left field: you could lose your job. You could find yourself injured and unable to work ever again. You could find yourself broke and needing to repair your car. All of these things need your attention and you need to start building up a buffer between you and any of these issues with your saved cash.
You may well be sitting around and waiting for an outcome from an accident that put you out of work in the first place. Waiting for compensation from a personal injury lawyer can take time, though, and you need to have something in place to help you to pay your bills. With all of this in mind, you need to consider how you could start building your emergency savings account.
Start A Budget
Sit down in front of your bank account online and make a note of everything that goes in and out each month. This can immediately help you to see where you’re going to be able to make adjustments and free up some of your cash. There is always extra money in your budget - you just have to find it. Make a spreadsheet to note down your currently income and expenditure so that you can play around with the formula until you get the outcome that you want. Emergencies aren't something that you can predict, so it really is a case that the more you save, the better off you will be financially in the long run.
Blank Your Savings Before You Spend Anything
When you are considering budgeting for savings, you are often thinking about what you cannot afford rather than what you can afford. By looking at your net salary, you can choose to put your savings aside before you break down any of your bill money. Put a category for emergencies in your budget, with a certain amount to put away each month. As each month passes, you’ll be able to watch your new emergency fund build up. This will then be in place when you need to cover the car breakdown or job loss - or even to carry you while you're on leave from work following an injury. This emergency fund is going to be your back up, and the savings line item that you create is going to make a huge difference.
Put Your Excess In
Did you win a little cash on a scratcher? Did you sell some toys from the kids and make some money? Each of these little cash boosts is best put into your emergency kit. Once you’ve filled out the budget and everything else is accounted for, you may have some leftover cash outside your budgeted play money at the end of the month. That surplus income needs somewhere to go, and your savings account is the perfect place for it!
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Trim The Fat.
Look through your new spreadsheet and see what you can tweak to save cash. Some of the suggestions could include:
Bringing in coffee from home.
Clipping coupons to save money on groceries
Moving to a different cable package to spend less.
Make food at home instead of eating out.
Start cycling to work everyday so that you can save money on gas.
Swap your utilities companies around to save cash.
Start shopping the cheaper brands instead of the more expensive ones.
Track What You Spend
Being on top of those silly purchases here and there throughout the week is important. It can really help you to spot the areas where your spending is becoming too much. If you’ve noticed that you’re through the money and your disposable income is dwindling, it’s time to plan some free activities and think about spending less. It could also help you to deal with cash and not spend everything on a debit card. Sometimes, seeing physical cash leaving your hand could make a massive difference to the way that you spend your money.
What You Can Do To Boost Your Emergency Funds
There are plenty of things that you can do to increase your emergency fund contributions so that you can build your savings much faster than you anticipated that you could. Here are a couple of the examples of what you can do about it:
Get Another Job
If you start a side hustle, or go out and get a part time job to go along with your savings. Starting to mow lawns in the summer and tidy gardens in the winter doesn't have to take too much time, but it can make a difference to your bank account. Whatever you do, a part time job is a good idea and you could build up your savings account hugely with the right one.
Shop Your Expenses
Price comparisons are the best way that you can cut down your costs and the more that you do this, the more money you can save. Set aside an hour or so in your calendar and start doing some price comparisons of your utilities, TV package, cell phone packages and even the insurances that you pay for in your home. Chances are that you can get the same package much cheaper elsewhere, and that just means that you’ve been spending money on your bills where you don’t have to.
Budgeting is a powerful tool to help you save some cash. You can breathe far easier once you have your emergency savings in place. Taking that first step may be scary - but you can do it!
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