Having some extra funds available for emergencies and unexpected expenses can be beneficial when you least expect them, and it’s for this reason that saving money in an emergency fund is essential to good personal finance.
Here Are Steps To Save Money In Building A 6-Month Emergency Fund (PHOTO: Crosswalk.com)
What is an Emergency Fund?
Before you start building your emergency fund let’s learn first what an emergency fund is. Emergency funds are a set amount of money saved specifically for unpredictable expenses that arise from an emergency such as unexpected hospitalizations or a sudden car repair. Having an emergency fund in place can ensure you have access to funds when you need them most. However, embarking on building a six-month emergency fund is quite challenging but here are Tips to help you be ready for unexpected expenses.
Here’s How To Build A Six Month Emergency Fund
- Store Funds In A Proper Savings Account
Saving money in building emergency funds is already your goal in mind, the next step is to open a savings account. Bask Bank’s Interest Savings Account is a perfect choice for creating an emergency fund. With a 4.15% variable APY (yearly percentage yield), you’ll be gaining more than 12 times the national average. Heaning your fund rises at an accelerated rate. Plus, the Interest Savings Account charges have no monthly payments. It’s also great for people who are starting to save because there’s no minimum deposit required to open an account and no minimum account balance.
- Go In With The Right Mindset
Adam Garcia, creator of The Stock Dork said that “Saving is primarily a mental game that you can defeat.” Putting away even a small amount of money regularly can eventually lead you to your objective. No matter how low your starting point is as long as you make savings part of your routine if your goals are realistic.
- Make Additional Deposits When You Have Extra Money
While it’s tempting to spend a new outfit or go on a vacation but putting extra money into your emergency fund is always practical. Studies show that the pleasure we bring from buying material things fades fast, while the peace of mind from being financially ready lasts much longer.
- Review Your Budget Regularly
Its important is to review your budget always to ensure your saving and spending necessities are still in line with your current financial situation. While you’re checking your budget, ask yourself whether you could be saving more and not wasting.
When Is Time To Start An Emergency Fund?
