7 tips for building an emergency fund

[jisansorkar12]

Do you have an emergency fund? That money you save to cover unexpected expenses? These situations can arise due to a health problem, loss of income or even a layoff. Want to know how to build your emergency fund? Then this post is for you!

If you don’t have an emergency fund, it’s a good idea to start building one right now. In this post, we’ll give you seven practical tips to help you build your emergency fund and have some peace of mind when dealing with unexpected expenses.

But first, think about the following questions. If you lost your job vietnam whatsapp list today, how long would you be able to support yourself without having to take out a loan? And if you had to pay for an emergency home repair, would you have the money readily available? Or would you have to, for example, use your overdraft or make a payment with a credit card, even though you knew you wouldn't be able to pay the bill later?

These questions are designed to help you understand whether you have financial resilience. In other words, the ability to deal with unexpected expenses that may affect your income or assets. Want to know if you have financial resilience? Then read this post . Being financially resilient gives you peace of mind when dealing with unexpected events. And having an emergency fund is a crucial part of this process.

Now let’s look at seven practical tips for building your emergency fund.

1) Save
Even though this tip is obvious, it is necessary. After all, some people think that money will accumulate on its own. So, even if it is just a little, you have to save. How much? That is up to you! Only you know your expenses and will be able to estimate how much you need or can afford to save for this emergency fund. But one thing is certain: if you don't save at least a little bit, you won't have any savings at all.

2) Make your budget
Do you know how much you spend each month on rent, condominium fees, transportation, food or mortgage payments? If you don't know, how will you know how much you can save? That's why it's important to keep your budget up to date. Here on the ABAC Blog, you can check out some important guidelines for creating your personal and family budget .

3) Pay yourself first
This tip may seem strange, but it's quite simple. There's no point in waiting until the end of the month to save what's left. Why? Because there's no money left. If the money is available in your account, you spend it. So, the best time to save is when the money hits your account before anything else, even paying your expenses. Did the money hit your account? Set aside that reserve right away and forget about it. Save, even if it's just a little bit, even if it's just R$10.

4) Commit
It is necessary to create the habit of saving, even if it is just a little. And that is why you have to save money before anything else, even paying your expenses. Because if you don't, you will save when you can and usually you won't. And then you don't create the commitment to save with yourself.

5) Prioritize
To save more, or even to be able to save, you may need to reevaluate your expenses and cut out things that don’t add value. Consider whether your expenses are necessary and whether they are aligned with what you want in the short, medium and long term. For example, in the short term, in three months, you want to buy a bicycle. And in the medium term, in a year, you want to go on a trip. And in the long term, you want to retire. You need to assess whether these expenses will harm your plans.

6) Let go
We often keep things at home that we don't use, but that still have value. Maybe you can sell some things that you no longer use, but that could generate extra income to put into your emergency fund.