Grow an Emergency Fund
Having an emergency fund is something that everyone wants. More people need to make it happen rather than just want it. An emergency fund is a must have, you never know when you will need it but when you do you will be glad that you have it. There are some ways to make it easier to grow your emergency fund.
When building an emergency fund you first need to determine how much you need in that fund. Most experts say that a good amount would be six months worth of earnings. That way in the event that you lose your income you can last at least six months while trying to find a new source of income. Not everyone will need the same amount, maybe you feel like you will need more than six months worth of income saved. Determining how much you will need in your emergency fund will take you sitting down with all of your monthly expenses listed out to determine how much you will need to be able to live without income for a designated amount of time, an amount of time that you choose. You will need to figure out how much you need to be saving each month to meet your emergency fund goal.
The next thing you need to do when building an emergency fund is decide where you will be keeping that fund. The money needs to be easily accessed, but not so easy that you are tempted to use it for everyday spending money. Experts say that if you want to put your money where you can get it when you need it, but not access it when you do not actually need it is to use an online bank. If you choose to use an online bank you are not able to just walk in when you decide that you want to get some money, making it easier for you to save it for emergencies instead of spending it when you should not be spending it. This account should make it easy for you to put money in without making it so easy you take money out whenever.
This fund needs to be used for emergencies only, that is why it is called an emergency fund. You need to make sure that you are only using it if there is an actual emergency. If you are starting or building an emergency fund you need to have already decided a goal amount. Every time you take money out of that account even if it is for an emergency you are adding to the amount that you still need to save. This means it will take even longer to get to your emergency fund goal. Just because you have a smaller or maybe even a large emergency and you need to take money out of the account does not mean that you do not need to pay yourself back and replace that money in your emergency fund.
You can build your emergency fund with minimum effort once you have a plan. You must sit down with a list of monthly expenditures and figure out what your overall savings goal is and what your monthly savings goal is. You need to stick to your plan; otherwise you may not be able to build the funds you desire. It does not have to be difficult, but you must take some time to develop your plan, that will be your hardest part. Once you have a plan you can stick to it and not think too much about it.