This post is contributed.
With all of the various outgoings we have in life, it seems that it’s a pointless endeavor trying to save any money. But an emergency fund is one of those things that we wish we had when problems come up. The reality is so many of us don’t have it. So, here’s why it’s time to have an emergency fund and let’s figure out how to start one.
It Could Save Your Life!
Not to make it like a life or death situation, but when we’re at the point in life where emergency after emergency piles on, we need some form of financial buffer to keep us going. Maybe family members are going to hospital, or you need time away from work without pay, or maybe it’s just that your fridge service appliances need fixing right now! Whatever the issue is, we don’t want to have to think about money when going through a very stressful time. At the end of the day, it’s the last thing we should be thinking of.
How Can We Save Up?
You might think it’s absolutely impossible. After all, every bit of money you have is going towards the essentials, and without becoming a minimalist, you won’t be able to put anything away. Let’s break it down, instead of turning it into an almighty task, make it smaller and more manageable. An emergency fund begins with how much you’d like to save. Whether this is the equivalent of a year’s wages, or a few months’ rent, whatever your choice, you’ve got something to aim for. From here, we calculate how much our outgoings are, and then we put a budget together. Once you’ve determined how much you need to save, you then open a savings account. This helps because you can put the money into somewhere that you don’t see every day. Out of sight, out of mind!
Turning It Into A Mindset
Once you’ve discovered the best way to save without it drastically impact on your lifestyle, you can become accustomed to this way of living. You may want to become a minimalist and live off the bare basics, but a lot of us have a lifestyle we’re accustomed to. The reality the situation is that saving an emergency fund is about the long game. But if we are to make any success of it, we have to get into the mindset of money saving. And for the vast majority of us, this means making a lot of sacrifices. Ultimately, you can make small sacrifices, such as by swapping brands of food or shopping at a cheaper supermarket, but once these habits stick it makes life a lot easier.
There are always going to be problems that come up where we need a hefty windfall, and if you don’t have an emergency fund, you’ll find yourself much further in the hole than before. It’s time to have an emergency fund, because whatever problems you face now and in the future, from a burst boiler to a family member being taken ill, we have to focus on these issues, and not worry about our finances.