There will always be financial situations you cannot account for and when these happen, your emergency fund savings will come in handy. For one, your reserve funds will help you keep afloat when your income is affected. Remember that your bills will still keep coming regardless of your personal circumstances.
If you get into any medical situation, your monthly financial obligations will not stop. You will soon find that your finances are being stretched thin. On one hand, you have to address your medical expenses such as hospital bills and even medicines. On the other, you have to keep meeting your monthly financial obligations in your budget. This is one of the reasons why your emergency fund is very important.
Your job situation is also one of the reasons why you need to strengthen your reserve funds. You could be enjoying a nice job but you never know what could happen in the future. The company you are working for might be bought out by competition and the next thing you know, you are being let go. As you look for a new job, you need to rely on your emergency account to pay the bills.
There are a lot of benefits your reserve fund brings you. CNBC even shares that some people do not even have enough to cover a $1,0000 emergency. It can help you address a lot of unexpected situations in life. It can be as minor as a broken item in your house or even when you suffer job loss. Now that you have an idea on just how important this fund is, the next step is to make sure that you are able to save and grow your account. Here are a few things to look into.
Save Loose Change
One of the easiest things you can start to do around the house that can help increase your emergency fund savings is to gather up and start saving the loose change. You might be surprised how much you can add to your reserve funds by just keeping a stock of all the loose change you have around the house and even your office.
The fastest way of making sure you gather all our loose change is put them all in a jar. As soon as you get home, put all your loose change in it. In a few weeks, you might need be surprised how fast the jar fills up and increase your savings. You just have to make sure you do not dip into your jar for frivolous expenses. Remember that you are saving for unexpected emergencies in the future.
Shave Amount From Paycheck
Your emergency fund savings will have a big boost if you add to it monthly straight from your paycheck every month. Set aside an amount that you can put aside for your reserve funds every month. Think of it as a bill or an expense that you have to pay month on month. Once you put it there, forget about it so you are not tempted to dip into it.
If and when your paycheck increases, you need to make sure that you increase your savings as well. Be on guard because you could be tempted to increase your expenses. You might start buying things you do not really need or committing to long-term payments such as a new car or a gadget that can put more unnecessary pressure on your household budget.
Cook And Eat At Home
It might not sound like a big deal but if you have been used to eating out or ordering take-out, this can put a lot into your emergency fund savings. This starts off with a list and forward meal planning. You then head off to the groceries and buy everything you need. As you get your groceries, you could consider buying in bulk as well. This can give you a few more savings to put into your reserve funds.
More than being able to save money, you get to learn a new skill – cooking. This can be a fun way to spend some quality time with your children. You can ask them to help you cook and even plan your family meals for the coming days. Cooking might also turn out as a great way to have some alone time especially if you have a demanding job.
Secure A Side Gig
Increasing your emergency fund savings will not be a walk in the park but it is not impossible as well. One thing you can consider is getting a side gig to help you increase your income. Getting a few hundred dollars every month from extra-curricular jobs on top of your day job can be a good way to get your reserve fund started.
One way to do this is to identify your skills, strengths, or even your hobby so you have a place to start. If you love baking then you can sell your cookies and pastries online. If you know how to use a camera and have a talent for getting nice photos then you can offer your services on weekends to family and friends. Do you have a talent in designing? Then you can look for online jobs that pay great so you can add to your emergency fund.
Lower Expenses At Home
As you look to increase your income, your emergency fund savings can increase if you try to lower down your expenses as well. It helps you create a big gap between your income and expenses where the difference can go straight to your emergency fund. The more consistent you are in keeping expenses down at home, the more your reserve funds will benefit from it.
One of the first things you need to do is audit your current household budget and take a look at the expense side. Identify the areas that you can cut down on. Do you still have magazine subscriptions that you are no longer reading? How about that gym membership that you’re not able to use? There are a number of expenses you can take out or lower down so you can free up funds in your budget.
Automate Your Savings
You might feel that saving money is a tedious process. It can be going to the bank and depositing the money personally to an account. However, you can choose to automate your savings process to make it as easy and efficient as possible. Everything happens in the background and you only have to check in a couple of times. You just have to make sure your fund is growing. There are people who use this to automate debt payments but you can also use it to save for a particular savings account.
Your emergency fund savings can help get you out of a sticky financial situation that comes unexpectedly. This can range from your car breaking down or even medical emergencies where you need to stay in the hospital. This can even be grown kids coming back to live with you.