Plenty of financial experts advise on having a savings account set up for emergencies. The future is unable to be seen, and a great many of different things could happen. You could win the lottery, or you could get injured and be out of work. There is really no way to tell, and the best way to be prepared for anything that life decides to throw at you is by having a lofty savings account ready for use at times of financial emergency.
The biggest problem that people have when starting their emergency fund is just that – leaving the money there for emergencies only. Saving can be hard for a lot of people, and it may seem easy to dip into that account for an extra day or two of vacation, or a new TV. Avoiding that temptation is key to maintaining a successful savings account, along with these useful tips and tricks!
1. Start small. While it's great to hope to reach a big goal one day, start in increments that are easily obtainable to keep you from getting discouraged. A couple hundred dollars to start with is a great first goal.
2. Make a simple spending plan based off of your monthly income. Start putting your money into categories, such as a grocery budget or a Starbucks limit. The extra can go into the savings account.
3. Look for small ways to cut corners to save money. Start putting all of your spare change in a jar and cashing it in at the end of the month and put that money into your emergency fund. Get a cheaper plan for your insurance, or cut up a credit card to avoid monthly payments and interest fees once you've closed the account.
4. Look into carpooling if you seem to be spending a lot on gas money. Cut down on unnecessary trips and spending, and limit your splurging or eating out. Just cutting back on a couple of things a month can make a difference!
5. Consider other ways to fund an emergency if possible. This company offers lawsuit loans that can help support your family while waiting for insurance claims to settle due to an injury. There are plenty of resources out there for families in need.
6. Stick to the plan. Keep making new goals for yourself and avoid skipping deposits. While life may throw unexpected things your way, make your emergency fund priority over other things to keep it growing steadily.
7. Don't check the balance often. You don't need to know how much money you've set aside until an emergency arises, so don't keep checking the balance. It'll only increase the temptation to use that money on non-emergencies.
8. Have it taken directly from your paycheck. Some businesses can let you send your check to more than one account. Doing that can eliminate the temptation to skip putting anything into your emergency fund one month.